Country Heights' Lee to sell Mines Resort land

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This article first appeared in The Edge Malaysia Weekly, on December 26, 2016 - January 1, 2017.


TYCOON Tan Sri Lee Kim Yew, who is behind the development of Mines Resort City in Seri Kembangan, Selangor, is putting up 38.12 acres of land for sale.

The sale of the leasehold commercial land may fetch as much as RM550 million.

“I want to concentrate on my company,” says Lee, when asked why he wanted to sell the land.

He tells The Edge that he wants to play a more active role in his public-listed flagship, Country Heights Holdings Bhd (CHHB).

CHHB has not fared well in terms of earnings. It posted a net loss of RM9.23 million for the financial year ended Dec 31, 2015 (FY2015), compared with a net profit of RM37.32 million the year before.

In FY2016, the group reported three quarters of consecutive losses until Sept 30.

Effective Oct 1 this year, Lee, who was previously CHHB chairman, assumed the role of executive chairman. That terminated the agreement in 2014 appointing him group adviser with a monthly salary of RM225,000, or an annual salary of RM2.7 million.

Asked if he wants to sell more land, the founder and single largest shareholder of CHHB hints that he may do so. But, he adds, he is also open to setting up joint ventures to develop other land parcels held in his private capacity.

A month ago, Lee sold three acres of residential land through tender for RM331 psf, which would have made him RM43.26 million.

He does not feel it is a bad time to sell despite the soft property market. He wants to be prepared and have sufficient funds when the time comes for CHHB to make investments. Moreover, Malaysia is attracting many investors from China.

“Bandar Malaysia is just 7 to 10 minutes drive from the land,” he says.

The 38.12 acres was once the site of the Mines Wonderland theme park, which ceased operations some years ago. Lee subsequently planned to build a tri-tower on the site, but that did not materialise.

He has appointed CBRE | WTW as exclusive marketing agent for the land, which has 75 years remaining on its lease.

The parcel is located at the southern tip of the 150-acre private lake in Kuala Lumpur known as the North Lake at Mines Resort City. A 1.3km stretch of the lake forms the border of the land.

The land is adjacent to The Mines shopping mall, Mines International Exhibition & Convention Centre (MIECC) and Philea Resort, while the Palace of The Golden Horses, Mines Resort & Golf Club and Mines Waterfront Business Park are nearby. All the commercial components are owned by CHHB, but the Mines Resort & Golf Club is owned by Lee. The Mines mall is owned by CapitaMalls Malaysia Trust.

CBRE | WTW, in its marketing document, refers to it as “The Last Jewel of Mines Resort City”. According to CBRE | WTW managing director Foo Gee Jen, a commercial land parcel with a similar leasehold tenure was transacted at RM350 psf two years ago, and a deal for a residential parcel was done at RM330 psf. This means the Mines Wonderland land, which measures 1.66 million sq ft, could fetch RM547.97 million to RM581.18 million.

Lee says he bought the land together with the tin mining lake, measuring 1,000 acres in total, for RM50 million in 1988.

A 300-metre canal runs across the eastern boundary of the land and links the North Lake with the South Lake via the The Mines mall, through to the Serdang KTM Jetty.

Foo says Lee has obtained a letter from the Subang Jaya Municipal Council stating that that the land has a plot ratio of four.

The land is held by Mines Wonderland Sdn Bhd. A search with the Companies Commission Malaysia (SSM) reveals that Lee owns  all but one share in the company, which is owned by his wife, Puan Sri Tan Bee Hong.Lee and Tan are directors of the company. According to SSM records, the previous company charges have been fully satisfied.

In 2015, The Edge reported that CHHB’s Mines Wellness Hotel had been leased for 15 years to a third party — Philea Mines Beach Resort Sdn Bhd. Philea rebranded the hotel Philea Mines Beach Resort and pays CHHB rent. 

A year ago, CHHB announced it was teaming up with Galaxus Corp Sdn Bhd and Lee to revamp the management and business of POGH through a company called Stallion Management Sdn Bhd.

Under the agreement, CHHB will have a 69% stake, Galaxus 30%, and Lee 1%. Through this partnership, CHHB plans to seek strategic partners to expand its hotel business, raise funds for expansion and secure five more hotels in Asia to be managed as part of its business.

The closing date for the tender is Feb 17, 2017.