MRCB will consider setting up REIT, says CEO

Mohamed Razeek Hussain exchanging documents with Maimoonah Mohamed Hussain. With them are MRCB senior vice-president and head of property Wong Dor Loke (left) and Danajamin Nasional Bhd CEO Ahmad Zulqarnain Onn.

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) will consider injecting some of its properties into a real estate investment trust (REIT) as part of the company’s growth strategy, said chief executive officer Mohamed Razeek Hussain.

“REIT has never been (far) away from our minds. It is a strategy that we might employ in the future, perhaps in the mid to long term.

“We are strengthening our balance sheet to enhance recurring income. When it is substantial and the time is right, we will consider,” he said after an agreement signing between MRCB and Affin Investment Bank Bhd yesterday.

Razeek was responding to a research report earlier this month that MRCB was gearing up for a REIT.

“For us, mid term would mean (within) three years and long term (is anything) beyond that,” he said.

Meanwhile, MRCB plans to raise RM400mil via a guaranteed commercial paper/medium-term note (CP/MTN) programme.

This is to finance its mixed commercial development, KL Sentral Park, which is valued at RM600mil.

MRCB Sentral Properties Sdn Bhd, a wholly-owned unit of MRCB, has appointed Affin Investment to act as principal adviser and lead arranger for the programme, which will be guaranteed by Danajamin Nasional Bhd.

The financial arrangement would come with an option of both floating and fixed interest rates, said Affin Investment managing director Maimoonah Mohamed Hussain.

“The MTN allows fixed-rate funding wherein MRCB can lock in the current low rates of interest, given the environment where interest rates are trending upwards.

“The CP, on the other hand, allows MRCB to issue short-term notes on a floating rate basis.”

Razeek said the first tranche, worth some RM50mil, would be issued “as soon as possible”. “For future tranches, it’s up to us to draw down whenever we want,” he said.

KL Sentral Park, which is about 18% completed, is scheduled for completion next year.

The project will comprise five blocks of office buildings, retail shops, business centres and green spaces with a net lettable are of about 518,000 sq ft.

By The Star