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This article first appeared in The Edge Malaysia Weekly on September 17, 2018 - September 23, 2018

THE Employees Provident Fund (EPF) is looking to dispose of its property in Avillion Admiral Cove in Port Dickson, Negeri Sembilan. The asset — Marina Vista Suite Hotel Block B — could fetch as much as RM50 million, sources say.

If sold, this would be the EPF’s third hotel sale since 2014.

When contacted, the retirement savings fund would neither confirm nor deny the rumour. “Buying and selling any investment is part of EPF’s investment process — to realise gain or rebalance our portfolio,” it says in an email response.

The Edge understands that the EPF has not hired an exclusive marketing agent but has instead asked real estate agents to look for a buyer for the asset. It is learnt that potential investors have already been sent an information memorandum (IM), providing details of the said asset.

According to an IM sighted by The Edge that was prepared by Zerin Properties, Marina Vista is an en-bloc strata building that houses 160 rooms with a net lettable area of 73,529 sq ft, and still has 79 years left on its lease.

The document states that the indicative price of the asset is RM50 million. When contacted, Zerin Properties CEO Previndran Singhe would not comment, citing confidentiality.

Avillion Admiral Cove is located on 100 acres along the seafront, adjoins Admiral Marina and Leisure Club, and offers an expansive view of Melaka Strait. Conceptualised in 1994, the project was developed by Reliance Pacific Bhd (now Avillion Bhd) and Keretapi Tanah Melayu Bhd with the first phase completed in 1998. Avillion Admiral Cove also features two blocks of 345 waterfront condominiums (Marina Bay and Marina Crescent), an international-class marina club (Admiral Marina and Leisure Club) with dry and wet berths, and waterfront bungalow and semidee land (Marina Mansion and Marina Cape).

The EPF would not comment on when it had purchased the hotel but according to Reliance Pacific’s 2009 annual report, Marina Vista on Admiral Cove was sold en bloc to an institutional investor together with a management contract with Avillion Hotel International to manage the property. The company’s 2010 annual report states that it had embarked on the Marina Vista project in Admiral Cove in its financial year 2008/09 and that construction was fast-tracked and completed ahead of schedule in March 2010. This means the asset is 8½ years old.

The Avillion group also manages the popular Avillion Port Dickson, Avillion Legacy Melaka, Avillion Cameron Highlands and Avillion Villa Cinta in Sanur, Bali.

It is noteworthy that this is not the first hotel asset to be sold by the EPF. In 2014, it disposed of Gurney Resort Hotel & Residences in Penang for RM160 million to Plenitude Bhd. Apart from 259 suites, the hotel also offered retail units, office space and 551 parking bays.

The retirement savings fund also sold the 142-suite Northam All Suite Hotel in Penang. When asked about it, the EPF would only confirm that the sale had been completed but would not provide any details.

A search on the internet shows that the hotel is now listed on HNG Capital Sdn Bhd’s website. This company also owns the 100-year-old Macalister Mansion in Penang. It is owned by Tan Sri H’Ng Bok San @ H’Ng Ah Ba (30%), Datuk H’ng Chun Hsiang (40%) and Datin H’ng Hsieh Ling (30%). It is not known how much the EPF eventually sold Northam All Suite Hotel for but it was reported that it was hoping to seal the deal at RM50 million at least.

Apart from these hotel assets, the EPF is also understood to be considering the sale of a Grade A office block — the Axiata Tower in Kuala Lumpur Sentral. In May, The Edge reported that the EPF had asked local and foreign real estate consultants to submit a request for proposal for a planned sale of the building. At the time, industry estimates put the value of the 30-storey building with a net lettable area of 355,096 sq ft at around RM530 million. The EPF is believed to have purchased the building in 2011 for about RM428 million.

When asked about the status of the sale, the retirement savings fund says it stands by its previous statement. In May, the EPF had told The Edge that it could not disclose details as plans were still at a preliminary stage. However, sources say it has yet to dispose of Axiata Tower, which is said to enjoy an occupancy of more than 90%.

Note that in its 2017 annual report released in March this year, the EPF states that the fair value of assets held for sale as at the date of statements of financial position is RM637.99 million. That amount, it says, is based on valuations carried out between 2013 and 2017, including the fair value of its assets held for sale of RM592.1 million.

The assets held for sale include 38 properties occupied by CIMB Group Holdings Bhd, a piece of land in Petra Jaya in Sarawak as well as the EPF’s investment in its associate Columbia Asia Sdn Bhd. The carrying value of the 38 investment properties and the Petra Jaya land as at Dec 31, 2017, was RM62.77 million. The process of sales is expected to be completed this year.

 

 

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