Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily, on November 15, 2016.

 

KUALA LUMPUR: Al-Aqar Healthcare Real Estate Investment Trust (REIT) is selling a 5,156-sq m piece of freehold land together with the 27-storey Hotel Selesa and the 31-storey Metropolis Tower office building (collectively referred to as Selesa Tower) in Johor Baru to privately held Optimum Impress Sdn Bhd for RM100 million cash.

Al-Aqar Healthcare REIT said it intends to use the bulk of the proceeds from the proposed disposal to repay bank borrowings, and for working capital and future acquisitions.

In a filing with Bursa Malaysia yesterday, Al-Aqar Healthcare REIT said it last Friday entered into a sale and purchase agreement (SPA) with Optimum Impress for the proposed disposal. Optimum Impress is owned by Ong Yoong Nyock, Ong Wei Kuan, Lee Chung Chern and Gan Hong Lee.

Al-Aqar Healthcare REIT said the original cost of investment in Selesa Tower was RM87.2 million on May 15, 2009. Its net book value stood at RM103.5 million as at Dec 31, 2015.

Selesa Tower is currently being leased and operated by Hotel Selesa (JB) Sdn Bhd, a subsidiary of JCorp Hotels and Resorts Sdn Bhd, pursuant to a lease agreement dated Dec 12, 2012 entered into with Al-Aqar Healthcare REIT for a term of 15 years. The annual net rental income is approximately RM7.2 million, said the trust. However, the existing lease agreement will be terminated upon completion of the proposed disposal.

At the same time, Optimum Impress has entered into a separate SPA with Hotel Selesa (JB) to acquire the latter’s business and certain identified business assets in relation to the operations and management of Hotel Selesa.

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