Experts list their best property picks: Menara Bumiputra-Commerce, Bandar Malaysia in focus

This article first appeared in The Edge Malaysia Weekly, on December 25, 2017 - December 31, 2017.
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THE most anticipated deal next year is the sale of Menara Bumiputra-Commerce. The owner, Pelaburan Hartanah Bhd, has put this 39-storey commercial building in Jalan Raja Laut, Kuala Lumpur, up for sale.

PHB had purchased the asset for RM460 million from CIMB Group through a sale and leaseback arrangement in December 2007. CIMB leased the building for an initial 10 years. It was reported that PHB hopes to get RM560 million for the building, which offers 626,672 sq ft in net lettable area.

What makes the deal interesting is securing a buyer for the office building, as it is understood that CIMB may vacate all but a few floors when the lease ends.

LaurelCap Sdn Bhd executive director Stanley Toh reckons that selling the asset could be a challenge. “With CIMB poised for an exit, at least 80% of the building will be vacant. In the current property climate, it will be an uphill task to move this property come 2018,” he says.

But Rahim & Co director, real estate agency, Robert Ang, whose firm is handling the sale, is up for the challenge. “Rahim & Co looks forward to selling this iconic building in downtown Kuala Lumpur, in its role as the exclusive marketing agent, on behalf of its owner PHB,” he says.

Meanwhile, property experts are waiting to see the conclusion of the Bandar Malaysia saga — who will bag the deal in the new round of request for proposal (RFP). Recall that the project was first awarded to China Railway Engineering Corp and Iskandar Waterfront Holdings Sdn Bhd on Dec 31, 2015. But in May this year, the deal was terminated, citing failure to fulfil payment obligations. A new RFP was made on July 5 with a July 20 deadline.

Alvin Tan, senior vice-president capital market at Savills Malaysia, says, “We understand from the market and that a new round of tenders will take place next year.”

However, Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah has repeatedly said the government is still negotiating the issue of the master developer. He was also quoted as saying that it will be “coming soon”. Could an announcement be made on the very last day of the year — similar to what happened in 2015? Only time will tell.

Yet another development the nation is waiting and watching out for is the impact of the nationwide freeze on commercial buildings. “What will happen to sites without planning permission?” Tan asks. “Based on the government’s recent announcement of a freeze on development orders for certain types of properties, attention now turns to the fate of the numerous development sites that have transacted at high prices over the past two to three years. Is it our expectation that some of these sites will be sold on to parties more attuned to the new regulations and requirements for securing a development order.”


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