SHAH ALAM: The Selangor State Development Corp (PKNS), a diversified group, will be injecting some of its existing assets worth around RM900 million into a private real estate company (PREC).
The private real estate company is being set up by PKNS to acquire new and existing assets of the corporation, in a bid to streamline its operations, reduce cost and improve the performance.
PKNS general manager Othman Omar said the first round of asset injection will involve its existing properties in Kuala Lumpur and Selangor, which will be carried out in phases.
The properties are Menara Worldwide and Wisma Yakin in Kuala Lumpur; Menara PKNS in Petaling Jaya; Kompleks PKNS in Shah Alam, Bangi and Kuala Selangor; De Palma Hotels in Ampang, Shah Alam, Kuala Selangor and Sepang; as well as SACC Mall and the Shah Alam Convention Centre.
"PREC will upgrade and transform these properties into better yielding assets for higher recurring income.
We may inject some of the new and existing properties into a real estate investment trust (REIT) in the next few years to benefit from the REIT tax incentives.
"There is no real pressure for us to go into a REIT yet. We will weigh the benefits before embarking on a REIT," Othman told Business Times.
Business Times first reported that PKNS planned to launch a REIT in 2010. It had identified 16 high-profile projects worth RM10 billion for injection into its REIT.
Othman said PREC will also acquire the retail, office and hotel components within PKNS' new development projects.
By Business Times (by Sharen Kaur)
Monday, March 19, 2012
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