Lim seeks partners for PBD redevelopment

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TAN Sri Desmond Lim Siew Choon is said to be in discussion with several potential investors, including Baring Private Equity Asia and Qatar Investment Authority (QIA), for the proposed redevelopment of Pusat Bandar Damansara (PBD) in Kuala Lumpur.

The Edge understands that Lim, the executive chairman of Malton Bhd and chairman of Pavilion Real Estate Investment Trust (REIT), is looking for partners to possibly invest at the equity level of landowner and developer Impian Ekspresi Sdn Bhd as well as in various components within the project.

Impian Ekspresi, Lim’s private vehicle, is building an integrated project comprising offices, serviced apartments and a retail component, with a gross development value of RM3 billion.

According to sources, the developer has held talks with Baring, which has over 30 portfolio companies in Asia, for a possible investment in the mall and office components. QIA, meanwhile, is believed to be weighing options related to investments in the mall or serviced residences.

“QIA is certainly the preferred partner for all of Lim’s projects. This is a huge project, so Impian Ekspresi is looking for supporters,” a source familiar with Lim’s businesses says, adding that Impian Ekspresi may have had discussions with more than just these two parties. 

One source says QIA is looking at the Malaysian market for more suitable investments.

Should the tie-up with QIA materialise, this would be the third mega project in Malaysia that Lim has partnered the Qataris. QIA had a 35.93% stake in Pavilion REIT as at Sept 26. Lim and QIA jointly own 66% equity interest in Jerantas Sdn Bhd, which is the developer of the multibillion-ringgit integrated project in Kuala Lumpur that will introduce the world’s first Harrods Hotel.

It is worth noting that Impian Ekspresi’s application to Dewan Bandaraya Kuala Lumpur for the site has been changed. The developer, which had initially said that seven of the nine existing office blocks in PBD would be redeveloped, later submitted plans for 11 blocks of various heights — from 14 to 57 storeys — on the 3.88ha site. 

But in a fresh application, Impian Ekspresi has added three more blocks, but the heights of the buildings have been reduced. The new proposal is for 11 office buildings, three serviced apartment blocks and a retail podium.

The heights of the office buildings have been reduced tremendously. Four of the office buildings will only be five storeys while another four will be seven storeys. Three other blocks will be 12, 14 and 18 storeys.

As for the serviced apartments, 808 units have been planned for three buildings, two of which will be 40 storeys while the other, 42 storeys. 

A filing with Bursa Malaysia shows that Impian Ekspresi is 51%-owned by Anjurantau Sdn Bhd and 49% by Ombak Mutiara Sdn Bhd. Anjurantau is wholly owned by West Glory Holdings Ltd, which is in turn held by Newcorp Development Ltd. Lim holds a 100% stake in Newcorp. The shareholders of Ombak Mutiara are Shahrin Osman and Datuk Sulaiman Kudus.

Impian Ekspresi is reportedly building an integrated project in PBD

Impian Ekspresi managed to get hold of the PBD land last year, following the settlement of a four-year dispute with the vendor of the land, Bukit Damansara Development Sdn Bhd (BDDSB), an indirect subsidiary of Johor Corp (JCorp). 

In May 2013, Impian Ekspresi, Malton and JCorp entered into an asset swap, whereby Impian Ekspresi will pay BDDSB RM500 million cash as well as provide 266,667 sq ft — to be divided into 186,667 sq ft and 80,000 sq ft — of future office space in PBD in exchange for the existing nine blocks. 

BDDSB also agreed to exchange the 186,667 sq ft of future office space, valued at RM140 million, for a 20-storey building in V [email protected] City Centre, owned by Malton. Accordingly, Malton holds the rights to space equivalent to RM140 million in the redeveloped PBD.

It must be noted that in March this year, Lim, through Jendela Mayang Sdn Bhd, announced plans to acquire an adjacent tract measuring 2.57ha from Selangor Properties Bhd. The Edge understands that a plan to incorporate both parcels is being finalised. 

For financial year ended Dec 31, 2013, Impian Ekspresi made a net profit of RM562,440 on the back of RM1.61 million in revenue. As at Dec 31, 2013, the company had total assets of 

RM781.56 million and total liabilities of RM762.37 million. There is also a charge on the company’s assets registered on Oct 25, 2013, for RM855 million. 

This article first appeared in The Edge Malaysia Weekly, on September 29 - October 5, 2014.