EPF working on the master plan for 926ha RRI land

PETALING JAYA: The tender for the re-development of the 926ha out of the 1,215ha Rubber Research Institute (RRI) Malaysia land in Sungai Buloh, that is now controlled by Kwasa Land Sdn Bhd, is expected to be called by the third or fourth quarter of this year, sources said.

The new developments would give the RRI land a huge physical and economic boost that would lift the land value of the area.

Sources said the Employees Provident Fund (EPF) was now working on the master plan for the 926ha site so that it would be able to call for tenders for some parcels of the land as the entire development was supposed to take place over a 10 to 15-year period.

Sources said the parcels were likely to be broken down to between 100 acres and 500 acres and as the RRI land had attracted massive interest, sources believed the tenders were something property developers were waiting for.

The tenders were supposed to be out by June but because this development required considerable scrutiny and strategising, it might take a little longer.

Besides the development led by Kwasa, the original owner of the land, RRI, would remain at the same location.

It will get a new hub and under the agreement with Kwasa, RRI will retain 216ha.

It intends to build the most modern research facilities including a museum, a commodity college, its headquarters and business clusters.

This will be funded by RRI from the proceeds of monetisation of the 1,215 ha that it had once owned.

In an interview with StarBiz, Malaysian Rubber Board (MRB) Director-General Datuk Dr Salmiah Ahmad declined to disclose the amount it would be getting for monetising the 1,215ha to Kwasa.

She also declined to reveal how much it would cost MRB to develop the new facilities.

“The proceeds will be given in different portions (over a period of time).

“In addition to this, the Government will continue to fund MRB for its management and operations,” she said. RRI is one of the three agencies that come under the purview of MRB.

She also could not say when the first portion of funds will be disbursed by Kwasa to MRB.

However, she indicated that MRB must submit its master plan for development of the 216ha by this year to the Government.

She said EPF would pay for the land but the pension fund would be able to recoup much of this when it tenders out the remaining 926ha, or 76% of the 1,215ha.

Of the total land bank, 73ha was allocated for MRT Co to build the Sungai Buloh MRT depot. That portion of land is being cleared by the company currently for development.

The Sungai Buloh land is divided by the Jalan Sungai Buloh-Shah Alam highway which slices the 216ha in the middle.

The northern portion is under the authority of the Shah Alam City Council. It houses the RRIM research station and the MRT depot.

The southern portion comes under the Petaling Jaya City Council. Townships around the area include Kg Baru Sungai Buloh, Kg Sungai Kedondong, Taman Subang Bestari, Tropicana Golf and Country Resort and Damansara Indah.

Salmiah said MRB would also be monetising other land bank where its facilities were located.

This included Menara Getah Asli which fronts the Petronas Twin Towers in Jalan Ampang, the RRI building in Jalan Ampang, and two others, one each in Jalan Stonor and Jalan Lidcol.

“MRB is blessed with some very strategic properties.

“(But) anything we need to do with these properties would be decided by the board and has to be approved by the Plantation Industries and Commodities Ministry. We also need to consult the Finance Ministry. It is really up to board to decide what it wishes to do with these assets and when it wants to do it.

“Our core activity is research and while we want to realise the value of our assets, (we have to do it systematically). We have to building our new premises before we can move out from our present offices that are located all over the Klang Valley,” she said.

She added that whatever the plans might be for the 926ha was not going to affect MRB, however, being on that site itself, the MRB would have to be kept in the loop, especially those near the 216ha.

By The Star

Redeveloping Old Klang Road

FAR East Organization, Singapore's largest private developer, plans to redevelop a commercial site in Old Klang Road, here, into an integrated lifestyle mixed development in three years.

Chief operating officer Chia Boon Kuah said the group had commenced a feasibility study on the supply and demand situation and the best product mix for the area.

Chia said in an interview with Business Times in Singapore recently that Far East was considering high-rise condominiums targeting the upper-middle income group, and retail components.

The group is also considering a 4-star hotel or serviced residences, and studying if the area has potential for medical suites.

"Old Klang Road is more developed today with the highways and other infrastructure. We think it is time to uplift the property market there and maximise its potential. But all these are still on the air. We have to wait for the lease held by the current tenants to expire in two years," Chia said.

Chia declined to reveal the project's gross development value and the property that it plans to redevelop.

On whether Far East would be keen to partner local developers and undertake joint venture projects here, Chia said the group was open to talks.

"We are not an active player in Malaysia and our feel of the market is not so good. So we want to remain cautious. We have land in Malaysia through an associate company, Yeo Hiap Seng Ltd, but the development plans are long term," Chia said.

A household name in Singapore and Malaysia, Yeo Hiap Seng has parcels of land in Johor and in other parts of Malaysia, held by its subsidiary Yeo Hiap Seng (Malaysia) Bhd.

On the redevelopment of Plaza Atrium in Lorong P. Ramlee, Chia said work was progressing.

Plaza Atrium, a 24-storey commercial block located next to Menara Pan Global, Menara SMI and Wisma Kim Seah, was built in 1984.

Far East made an application in 2005 to redevelop Plaza Atrium into a serviced apartment block and to build an adjacent 34-storey residences comprising 109 luxury units.

"We are bullish on the hospitality market. We will look out for interesting properties to own, to enter into a joint venture or manage in Malaysia, Vietnam and Indonesia while increasing our portfolio in Singapore," Chia said.

Far East, through Far East Hospitality, is the largest owner-operator of serviced apartments and hotels in Singapore with nearly 3,000 hotel rooms and 1,500 serviced apartments in its portfolio.

Chia said the group was investing S$1 billion (RM2.45 billion) to build four new hotels and a serviced apartment block in Singapore.

This will add about 1,000 hotel rooms and 200 serviced apartments to the current room inventory over the next four to five years.

By Business Times

IGB planning two more REITs?

PETALING JAYA: IGB Corp Bhd is said to be mulling over another two real estate investment trusts (REITs) to unlock the value of its office and hotel assets after the company announced plans last week to establish and list a retail REIT on Bursa Malaysia.

An analyst with a bank-backed brokerage said IGB's management was looking at the possibility of launching an office REIT after the debut of its retail REIT, to be followed by a hotel REIT after that.

“Such plans would crystallise the deeply embedded value of its office and hotel assets,” he told StarBiz.

The listing of IGB's maiden REIT, the retail REIT, around the third or fourth quarter of this year is to unlock the value of its two prime retail assets Mid Valley Megamall and The Gardens Mall.

Both the malls are currently parked under IGB's 75%-owned unit, KrisAssets Holdings Bhd.

Mid Valley Megamall has a net lettable area (NLA) of 1.77 million sq ft and The Gardens has 820,000 sq ft. The two retail assets have an estimated total asset value of close to RM4bil.

In the hospitality sector, IGB owns 16 hotel assets in Malaysia and seven overseas. It is also said to be building two new hotels in Penang.

As for its office portfolio, IGB owns seven office buildings with total NLA of 2.2 million sq ft. Of its office portfolio, five are in Mid Valley City in Kuala Lumpur where its two retail malls are also located.

The buildings are Menara IGB with NLA of 251,751 sq ft; Centrepoint South (233,804 sq ft); Centrepoint North (231,115 sq ft); Gardens North Tower (426,870 sq ft); and Gardens South Tower (408,314 sq ft).

The other two buildings in the city are Menara Tan & Tan with NLA of 340,596 sq ft and Plaza Permata with 190,511 sq ft.

The analyst said Mid Valley City's office market remained strong, in-line with the strong demand for suburban office space.

“The strong rental demand could be attributed to the rising maturity of the area, easy accessibility as well as the appeal of Mid Valley MegaMall and Gardens Mall,” he added.

The most recently completed office buildings Gardens South and North Tower enjoy occupancy rates at over 90% respectively. They command average rental rates of RM6 per sq ft (psf) to RM6.50 psf; comparable to buildings in Kuala Lumpur city centre.

Menara IGB, Centrepoint North and Centrepoint South towers have occupancy rates of 96% to 100%, but their rental rates are slightly lower at RM4.20 psf to RM5 psf given that these are not new buildings.

The group's two other office buildings Menara Tan & Tan and Plaza Permata in the city continue to deliver occupancy rates in excess of 85%.

A recent research note on IGB from a local brokerage said IGB's under-appreciated portfolio of office buildings would be able to provide significant valuation kicker to the group.

“IGB's portfolio of office buildings are all carried in its book at historical costs of just RM550mil versus our estimated market value of RM1.61bil.

“The Gardens North Tower is carried in its book at just RM140mil or RM329 psf, while Gardens South Tower is at RM136.9mil or RM335 psf.

“This is despite both buildings enjoying excellent prime rentals of RM6-6.50 psf. Based on capitalisation rates of between 6%-7%, the potential revaluation surplus is estimated to be about RM1.05bil, representing almost 70 sen/share (or 28% of IGB's current market capitalisation),” the report added.

By The Star

E&O buys Princes House in London for RM100.9mil

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) is acquiring a freehold office cum retail building in central London known as the Princes House for £20.25mil (RM100.9mil).

E&O said on Monday it had entered into an asset sale contract with the Glasgow City Council to acquire the property.

"The property is intended to be continued for the current mixed use but offers the opportunity in the future, subject to obtaining all relevant consents, for either a substantial refurbishment of the existing building or potential redevelopment into serviced suites or residential apartments," it said.

E&O said the property had the consent to increase the existing floor area by infilling the southern lightwell and general rationalisation of services.

The vendor had acquired the property in March 2006 for £21.70mil.

By The Star

E&O makes overseas debut with UK buy

Eastern & Oriental Bhd (E&O), Malaysia’s premier lifestyle property development group, has agreed to acquire Princes House, a prime freehold office cum retail building in central London for £20.25 million (RM99.63 million).

In a filing to Bursa Malaysia, E&O said the acquisition was expected to be completed by June 2012.

The property was acquired through Oriental Light (Guernsey) Ltd, a wholly-owned unit of E & O Properties (Guernsey) Ltd, which in turn is a wholly-owned unit of E & O.

The vendor was Glasgow City Council, which acted as the administering authority for the Strathclyde Pension Fund.

The proposed acquisition was in line with E & O’s intention to set up an office in London to create a presence for the group to showcase and market its projects as well as for business development to explore business opportunities in the United Kingdom, it said.

Part of the property may also be considered to house the E & O Group’s office in the UK in a sought-after West End London address, it added.

By Bernama