Malaysia’s SP Setia Bhd and Sime Darby Bhd said they plan to develop 8 billion-pounds ($12 billion) worth of homes, offices and shops on the south bank of the River Thames after buying London’s Battersea Power Station site from liquidators for 400 million pounds.
The investors will retain the Art Deco power plant, according to an e-mailed statement by the companies in Kuala Lumpur today.
The building, with four iconic 350-foot-high smokestacks, has been vacant since it closed in 1982.
“The development will be the catalyst for strong rental and capital growth in the area,” Liew Kee Sin, SP Setia’s group chief executive officer, said in the statement.
Previous plans for the site, 2.2 miles (3.5 kilometers) from the House of Parliament, included a theme park and a mall that would have been suspended between the chimneys.
At least 10 bids were submitted for the building, including one from Russian billionaire Roman Abramovich’s Chelsea Football Club Ltd, a person familiar with the matter said in May.
SP Setia, the Southeast Asian nation’s biggest publicly traded property developer by sales, and Sime Darby will each take a 40 percent stake in the project.
The Employees Provident Fund, Malaysia’s biggest pension fund, will hold the remainder, they said.
Development will be carried out over 15 years with expected total sales of as much as 8 billion pounds, according to the statement. Construction is estimated to cost 200 million pounds in the first two years, it said.
Urban Redevelopment
“The Battersea project represents an excellent opportunity for us and our partners to expand our footprint into a key international market,” Mohd Bakke Salleh, Sime Darby’s group chief executive, said in the statement.
The project will be part of the largest urban redevelopment area of central London. The Malaysians bought the London landmark, Europe’s largest brick building, after its owner failed to pay debts and was put into administration.
Planning permission was granted to Real Estate Opportunities Plc, controlled by Irish developer Treasury Holdings Ltd., last year for a 5.5 billion-pound redevelopment of the power station.
SP Setia tried to buy the debt related to the power station in November for 262 million pounds and the offer was rejected.
Creditors led by Lloyds Banking Group Plc and Ireland’s National Asset Management Agency put the REO units that owned the site into administration, a U.K. type of bankruptcy reorganization, in December after they failed to make loan payments.
By Business Times
Thursday, July 5, 2012
Sime Darby may seal Battersea deal this week
TA Securities says it does not rule out the possibility of the Employees Provident Fund taking up a minority equity stake in the project at a later point in time.
SIME Darby Bhd, the country's largest publicly-traded plantation company by revenue, is poised to sign by as early as this week a sales and purchase agreement (SPA) for the coveted Battersea Power Station in London.
"(The) management is targeting to sign the SPA today. According to (the) management, the development plan has been acquired from the previous owner (Real Estate Opportunity plc), which has already been approved by the authority," TA Securities said in a report dated July 4th.
"This would enable the joint-venture company to commence the development immediately instead of getting a new development approved, which in a typical development size could take few years," the report stated.
TA added that it does not rule out the possibility of the Employees Provident Fund taking up a minority equity stake in the project at a later point in time.
Last month, Sime Darby and its partner in the venture, SP Setia Bhd, said that they had emerged as the preferred bidders for Battersea.
The duo had outbid rivals from parties such as Russian tycoon Roman Abramovich, whose Chelsea football club is located close to London's Battersea Power Station.
The power station is a famed part of London's skyline and its cultural influence has led the British government to list it as a Grade II-status building, meaning "particularly important building of more than special interest".
"The project will be on a build-and-sell concept. The first phase of development will be the residential unit. More than 50 per cent of the site will consist of residential unit, while the balance portion will be for commercial purposes," TA said in the report.
It is understood that the redevelopment of Battersea will fetch a gross development value of STG8 billion (RM39 billion) over 17 years and that profits from the project are expected to kick in from 2016 onwards.
"(The) management declined to reveal any financial details but indicated that the return on invested capital of the project will be higher than the group's hurdle rate of 15 per cent.
Profit before interest and tax margin is expected to be higher compared with the typical 20 per cent to 25 per cent that a property development project in the UK could fetch," the research firm said.
Also in the report, TA said it has a "buy" call on Sime Darby, with a target price of RM11.38 a share.
Sime Darby shares closed at RM9.93 a share, giving it a market capitalisation of RM58.53 billion, or more than two times the market capitalisation of Felda Global Ventures Holdings Bhd, which stood at RM20.06 billion yesterday.
By Business Times
"(The) management is targeting to sign the SPA today. According to (the) management, the development plan has been acquired from the previous owner (Real Estate Opportunity plc), which has already been approved by the authority," TA Securities said in a report dated July 4th.
"This would enable the joint-venture company to commence the development immediately instead of getting a new development approved, which in a typical development size could take few years," the report stated.
TA added that it does not rule out the possibility of the Employees Provident Fund taking up a minority equity stake in the project at a later point in time.
Last month, Sime Darby and its partner in the venture, SP Setia Bhd, said that they had emerged as the preferred bidders for Battersea.
The duo had outbid rivals from parties such as Russian tycoon Roman Abramovich, whose Chelsea football club is located close to London's Battersea Power Station.
The power station is a famed part of London's skyline and its cultural influence has led the British government to list it as a Grade II-status building, meaning "particularly important building of more than special interest".
"The project will be on a build-and-sell concept. The first phase of development will be the residential unit. More than 50 per cent of the site will consist of residential unit, while the balance portion will be for commercial purposes," TA said in the report.
It is understood that the redevelopment of Battersea will fetch a gross development value of STG8 billion (RM39 billion) over 17 years and that profits from the project are expected to kick in from 2016 onwards.
"(The) management declined to reveal any financial details but indicated that the return on invested capital of the project will be higher than the group's hurdle rate of 15 per cent.
Profit before interest and tax margin is expected to be higher compared with the typical 20 per cent to 25 per cent that a property development project in the UK could fetch," the research firm said.
Also in the report, TA said it has a "buy" call on Sime Darby, with a target price of RM11.38 a share.
Sime Darby shares closed at RM9.93 a share, giving it a market capitalisation of RM58.53 billion, or more than two times the market capitalisation of Felda Global Ventures Holdings Bhd, which stood at RM20.06 billion yesterday.
By Business Times
Hektar REIT to acquire malls for RM181m
Hektar Asset Management Sdn Bhd, the Manager of Hektar Real Estate Investment Trust (Hektar REIT), is set to acquire two prime shopping malls in Kedah for RM181 million.
The malls, the Landmark Central in Kulim and Central Square in Sungai Petani, are to be acquired for a purchase consideration of RM98 million and RM83 million, respectively.
"The two malls in Kedah would further enhance the long-term value of Hektar REIT’s property portfolio. With that, we can now spread our portfolio to the entire west coast of Peninsula Malaysia, augmenting our presence in Selangor, Melaka and Johor.
"Additionally, the acquisition is in line with the REIT's investment strategy to create and enhance the value of its acquired assets," Chairman and Chief Executive Officer of Hektar Asset Management, Datuk Jaafar Abdul Hamid said in a statement, today.
The acquisition of both malls signifies Hektar REIT's expansion to the northern region.
It is in accordance with its investment strategy of targeting prime neighbourhood malls, as they are more resilient during times of an economic downturn, capitalising on the economic growth and vibrancy of the retail market.
"Approximately RM19 million has been allocated as the initial cost of exterior and interior refurbishments of both malls, which will be financed via internal funds and bank borrowings.
"The refurbishments will endeavour to improve the value of both assets by drawing a good tenancy mix, facilitating improvements in rental rates and eventually attracting a commendable consumer traffic," Jaafar said.
Currently, Hektar REIT's portfolio comprises Subang Parade, Mahkota Parade (Melaka) and Wetex Parade (Johor).
The acquisition will also increase the REIT's gross asset value to RM1.04 billion.
The enlarged net lettable area (NLA) of Hektar REIT is expected to increase by 54 per cent, from 1.1 million square feet to 1.7 million square feet, after the proposed acquisition of both malls.
By Bernama
The malls, the Landmark Central in Kulim and Central Square in Sungai Petani, are to be acquired for a purchase consideration of RM98 million and RM83 million, respectively.
"The two malls in Kedah would further enhance the long-term value of Hektar REIT’s property portfolio. With that, we can now spread our portfolio to the entire west coast of Peninsula Malaysia, augmenting our presence in Selangor, Melaka and Johor.
"Additionally, the acquisition is in line with the REIT's investment strategy to create and enhance the value of its acquired assets," Chairman and Chief Executive Officer of Hektar Asset Management, Datuk Jaafar Abdul Hamid said in a statement, today.
The acquisition of both malls signifies Hektar REIT's expansion to the northern region.
It is in accordance with its investment strategy of targeting prime neighbourhood malls, as they are more resilient during times of an economic downturn, capitalising on the economic growth and vibrancy of the retail market.
"Approximately RM19 million has been allocated as the initial cost of exterior and interior refurbishments of both malls, which will be financed via internal funds and bank borrowings.
"The refurbishments will endeavour to improve the value of both assets by drawing a good tenancy mix, facilitating improvements in rental rates and eventually attracting a commendable consumer traffic," Jaafar said.
Currently, Hektar REIT's portfolio comprises Subang Parade, Mahkota Parade (Melaka) and Wetex Parade (Johor).
The acquisition will also increase the REIT's gross asset value to RM1.04 billion.
The enlarged net lettable area (NLA) of Hektar REIT is expected to increase by 54 per cent, from 1.1 million square feet to 1.7 million square feet, after the proposed acquisition of both malls.
By Bernama
TA Enterprise plans to set up REIT
TA Enterprise Bhd plans to set up a Real Estate and Investment Trust (REIT) to unlock the value of its properties under management.
"If we were to put all the major assets into a REIT, then we can unlock the value and raise money to repay bank loans, while funding projects in the pipeline," its Chief Executive Officer, Datin Tan Kuay Fong said.
She was speaking to reporters after the company's annual general meeting here today.
However, she declined to reveal further details, as to when the company plans to launch the REIT.
"We will let you know when we ready. Currently, we are still exploring the opportunities," she said.
Meanwhile, TA Enterprise Bhd subsidiary, TA Global Bhd, has received shareholders' approval to jointly develop a hotel and residential building in West Georgia Street in Vancouver (Canada) with a Canadian company, Birkbeck Trust on a 50-50 basis.
The building has a projected Gross Development Value (GDV) of RM1.54 billion and is expected to generate a profit of RM423.46 million with both companies receiving an equal profit.
On the domestic front, the company is expected to launch the Peninsular Puchong residential project in the fourth quarter of this year, or in the first quarter of 2013.
The launch of the project will also depend on market demand as at present, the local property outlook is not so vibrant.
By Bernama
"If we were to put all the major assets into a REIT, then we can unlock the value and raise money to repay bank loans, while funding projects in the pipeline," its Chief Executive Officer, Datin Tan Kuay Fong said.
She was speaking to reporters after the company's annual general meeting here today.
However, she declined to reveal further details, as to when the company plans to launch the REIT.
"We will let you know when we ready. Currently, we are still exploring the opportunities," she said.
Meanwhile, TA Enterprise Bhd subsidiary, TA Global Bhd, has received shareholders' approval to jointly develop a hotel and residential building in West Georgia Street in Vancouver (Canada) with a Canadian company, Birkbeck Trust on a 50-50 basis.
The building has a projected Gross Development Value (GDV) of RM1.54 billion and is expected to generate a profit of RM423.46 million with both companies receiving an equal profit.
On the domestic front, the company is expected to launch the Peninsular Puchong residential project in the fourth quarter of this year, or in the first quarter of 2013.
The launch of the project will also depend on market demand as at present, the local property outlook is not so vibrant.
By Bernama
TTDI residents want MRT tracks to be realigned
RESIDENTS of Pinggir Zaaba in Taman Tun Dr Ismail, Kuala Lumpur, want Mass Rapid Transit Corporation (MRT Corp) to realign the MRT track away from their area.
During a press conference held at one of the residents’ homes yesterday, 44 owners voiced out their concerns and grievances, stating that the encroachment of the final Klang Valley Mass/My Rapid Transport (KVMRT) will definitely affect their lives.
“From the very beginning, MRT Corp has been telling us not to go to the press or picket and we took this in good faith, until a recent meeting in March when MRT Corp met with 25 other owners along the street (not inclusive of the 44 home owners present) and negotiated with them to buy their houses.
“MRT Corp has to understand that we are not against the project but are worried about the remaining 44 houses? While the 25 houses selected by MRT Corp have the option to stay put, sell or move out, the remaining owners are left without any options,” said Mokhtar Abdul Karim, 68, who has been living in the area for the past 35 years.
Mokhtar said with the upcoming MRT project, the value of properties along Pinggir Zaaba had dropped significantly by 20 to 25%.
“Would anyone consider buying the properties here when there is so much noise pollution with the MRT passing by every minute of the day?
“We want MRT Corp to consider making amends in the form of compensation for devaluation of properties, other losses as well as financial assistance for renovation of the properties to make them ‘livable’.
“Mitigation work for individual households in terms of noise, vibration and dust should also be done,” he said.
Pinggir Zaaba Home Owners Association (PZHOA) pro-tem committee chairman Teoh Chye Tee said the presence of a massive structure in front of their homes would definitely affect their lives during and even after the construction period.
“With the construction taking place, there is bound to be foreign workers walking around and heavy machinery in the area. We cannot imagine the condition of the streets or even our homes when the project starts. To-date, we have not received any Detailed Environment Impact Assessment (DEIA) for Pinggir Zaaba.
“There is still time for MRT Corp to realign the track or else we have to face the consequences of property value loss, risk exposure and its impact on our daily lives,” said Teoh, adding that MRT Corp should be mindful of their responsibilities and obligations to the people who are adversely affected by the mega project.
He added that the residents would prefer to engage an independent body to decide on the value of their property and that MRT Corp should not be the one deciding on the final price.
Dr Saiful Azhar Rosli, a resident in the area since 1987, also agreed with the concerns of his neighbours and wants MRT Corp to realign the track.
“This has always been a peaceful neighbourhood and the majority of residents are senior citizens. We rely on the facilities and amenities in the area and when the project starts, how do you expect us to sell our homes and move out immediately?” Dr Saiful asked.
PZHOA pro-tem committee had scheduled numerous meetings with Land Public Transport Commission (SPAD), Syarikat Prasarana Negara Bhd (SPNB) and MRT Corp since Jan 15 last year.
Despite certain assurances, both written and verbal by MRT Corp over the period of time, residents feel that they have been kept in the dark in terms of plans and reports, which were requested from MRT Corp earlier.
Segambut BN chairman Jayanthi Devi Balaguru, who was present at the meeting, said she had written to MRT Corp on June 19 stating the Pinggir Zaaba residents’ request, but had not received any response to date.
“Residents want the track to be realigned or else compensated adequately.
“Why can’t MRT Corp just revert to the original blue print or realign the route underground?” asked Jayanthi, adding that this would be more cost-effective compared to the current plan.
She said she would propose for a meeting with representatives from the Prime Minister’s Department, Federal Territories and Urban Wellbeing Ministry, SPNB, Kuala Lumpur City Hall and MMC-Gamuda Joint Ventures Sdn Bhd to be held with the residents.
By The Star
During a press conference held at one of the residents’ homes yesterday, 44 owners voiced out their concerns and grievances, stating that the encroachment of the final Klang Valley Mass/My Rapid Transport (KVMRT) will definitely affect their lives.
“From the very beginning, MRT Corp has been telling us not to go to the press or picket and we took this in good faith, until a recent meeting in March when MRT Corp met with 25 other owners along the street (not inclusive of the 44 home owners present) and negotiated with them to buy their houses.
“MRT Corp has to understand that we are not against the project but are worried about the remaining 44 houses? While the 25 houses selected by MRT Corp have the option to stay put, sell or move out, the remaining owners are left without any options,” said Mokhtar Abdul Karim, 68, who has been living in the area for the past 35 years.
Mokhtar said with the upcoming MRT project, the value of properties along Pinggir Zaaba had dropped significantly by 20 to 25%.
“Would anyone consider buying the properties here when there is so much noise pollution with the MRT passing by every minute of the day?
“We want MRT Corp to consider making amends in the form of compensation for devaluation of properties, other losses as well as financial assistance for renovation of the properties to make them ‘livable’.
“Mitigation work for individual households in terms of noise, vibration and dust should also be done,” he said.
Pinggir Zaaba Home Owners Association (PZHOA) pro-tem committee chairman Teoh Chye Tee said the presence of a massive structure in front of their homes would definitely affect their lives during and even after the construction period.
“With the construction taking place, there is bound to be foreign workers walking around and heavy machinery in the area. We cannot imagine the condition of the streets or even our homes when the project starts. To-date, we have not received any Detailed Environment Impact Assessment (DEIA) for Pinggir Zaaba.
“There is still time for MRT Corp to realign the track or else we have to face the consequences of property value loss, risk exposure and its impact on our daily lives,” said Teoh, adding that MRT Corp should be mindful of their responsibilities and obligations to the people who are adversely affected by the mega project.
He added that the residents would prefer to engage an independent body to decide on the value of their property and that MRT Corp should not be the one deciding on the final price.
Dr Saiful Azhar Rosli, a resident in the area since 1987, also agreed with the concerns of his neighbours and wants MRT Corp to realign the track.
“This has always been a peaceful neighbourhood and the majority of residents are senior citizens. We rely on the facilities and amenities in the area and when the project starts, how do you expect us to sell our homes and move out immediately?” Dr Saiful asked.
PZHOA pro-tem committee had scheduled numerous meetings with Land Public Transport Commission (SPAD), Syarikat Prasarana Negara Bhd (SPNB) and MRT Corp since Jan 15 last year.
Despite certain assurances, both written and verbal by MRT Corp over the period of time, residents feel that they have been kept in the dark in terms of plans and reports, which were requested from MRT Corp earlier.
Segambut BN chairman Jayanthi Devi Balaguru, who was present at the meeting, said she had written to MRT Corp on June 19 stating the Pinggir Zaaba residents’ request, but had not received any response to date.
“Residents want the track to be realigned or else compensated adequately.
“Why can’t MRT Corp just revert to the original blue print or realign the route underground?” asked Jayanthi, adding that this would be more cost-effective compared to the current plan.
She said she would propose for a meeting with representatives from the Prime Minister’s Department, Federal Territories and Urban Wellbeing Ministry, SPNB, Kuala Lumpur City Hall and MMC-Gamuda Joint Ventures Sdn Bhd to be held with the residents.
By The Star
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