This article first appeared in The Edge Malaysia Weekly on May 29, 2017 - June 4, 2017

REV Asia Bhd could morph into a property player after it divests its core advertising and social media assets to Media Prima Bhd. After the sale is completed, Rev Asia will be left without a core business and must find a new one if it intends to maintain its listing status.

According to Catcha Group Pte Ltd co-founder and CEO Patrick Grove, the group is in talks with Rev Asia to collaborate on the Kuala Lumpur Internet City (KLIC) project. Catcha Group is Rev Asia’s largest shareholder with  63.13% equity interest.

“We’re finding a way to involve it [Rev Asia] in the KLIC project and we’ll bring on board external partners as well,” Grove told The Edge on the sidelines of Catcha Group’s Wild Digital conference in Kuala Lumpur last week.

Grove, who sits on Rev Asia’s board, says this is one way to help find a new core business in order for the entity to maintain its listing status on Bursa Malaysia.

After the divestment, Rev Asia is expected to receive about RM73.5 million, resulting in a one-off gain of RM53.32 million. Its coveted assets are parked under Rev Asia Holdings Sdn Bhd, which is 70%-owned by Rev Asia and 30%-owned by Youth Asia Sdn Bhd.

According to an earlier statement, Rev Asia said it would pay out RM59 million in dividends to shareholders and settle RM3.18 million owed to Youth Asia. It would also use the proceeds for working capital, incentive payments to selected employees and other expenses related to the deal.

Exact details have yet to be confirmed, but Rev Asia could formally take on the role of master developer of the proposed internet city.

The KLIC project is part of the recently unveiled Digital Free Trade Zone (DFTZ) initiative, which will see China’s Alibaba Group use Malaysia as its regional logistics hub for e-commerce. KLIC is envisioned as a satellite services hub in Bandar Malaysia and a digital hub for at least 1,000 global and local internet companies.

KLIC entails the development of about five million sq ft of space over a 15-year period with a gross development value of RM5 billion.

It is understood that the Catcha Group will work with property developers or construction firms to build the physical space for KLIC. Grove adds that the group’s investee company, Common Ground Works Sdn Bhd, will also have a role in operating co-working spaces in KLIC.

“Common Ground will play a massive role in this. As part of the internet city, it’s important to have a co-working space. Our crazy aim is that Common Ground will build the world’s largest co-working space in KLIC. So, imagine an entire building as a co-working space,” says Grove.

Common Ground, launched in March in Kuala Lumpur, operates 17,000 sq ft of co-working space out of Wisma UOA Damansara II. It intends to expand around Malaysia and eventually Southeast Asia.

When it was first announced, Catcha Group’s involvement in a property project like KLIC did raise a few eyebrows. After all, it is known for building and investing in internet companies, not for property development or construction.

To that, Grove quips, “We admit, we do not know how to build a building. But we do know what companies want.” He says Catcha Group’s portfolio of over 60 companies across the region makes it one of the largest internet company tenants around.

“Our companies rent more space than any other internet company in the region, so we know more about what they want and need from a building, landlord and a suburb. It’s the simple things, like, you know, in most buildings the air conditioning cuts off at 7pm and security is doubled. Most internet companies don’t work 9-to-5. A lot of work is done after 7pm,” Grove says.

These plans are not withstanding the recent drama surrounding Bandar Malaysia. The Ministry of Finance Inc’s TRX City Sdn Bhd, which owns Bandar Malaysia, is on the hunt for another partner to develop the mega project after the government pulled the plug on an earlier consortium involving Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corp (M) Sdn Bhd.

Grove shrugs off that development and says the planning for KLIC, which is supposed to be located in Bandar Malaysia, goes on as usual.

“For KLIC, it’s really business as usual. We are not the master developer of Bandar Malaysia. We are building an internet city in Bandar Malaysia.

“We presented the idea to Prime Minister Datuk Seri Najib Razak and his team and they liked it. It was on Najib’s recommendation that we build the Internet city in Bandar Malaysia,” Grove says.

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