Menara ING may be turned into a hotel

-A +A

menara-ing_35_1054MENARA ING, a 25-year-old office building in Jalan Raja Chulan in Kuala Lumpur’s Golden Triangle, is likely to be converted into a hotel by its new owner, Goldstone Kuala Lumpur Sdn Bhd.

This appears to be a move in the right direction as it is getting more difficult to fill up the available office space, particularly in the older buildings, as more supply comes into the market.

Property consultancy firm Rahim & Co said recently that some nine million sq ft of office space will be added in the Klang Valley in the next three to five years, exerting pressure on rents.

On the other hand, the Kuala Lumpur Tourism Master Plan 2015-2025 released by Dewan Bandaraya Kuala Lumpur (DBKL) highlights that the capital city needs more hotel rooms. It projects that by 2020, an additional 35,504 new rooms — ranging from budget to luxury — will be required to cater for an anticipated increase in tourist arrivals of 18.66 million from 15.18 million in 2014.

Located just minutes away from prominent landmarks such as the Petronas Twin Towers and Pavilion Kuala Lumpur, Menara ING is said to be just 20% occupied currently as anchor tenant ING Insurance Bhd has vacated the building following AIA Group Ltd’s purchase of its insurance operation in 2012.

Goldstone Kuala Lumpur purchased the 20-storey office tower as well as a 3½-storey annexe block and basement car park offering 190 bays from AmTrustee Bhd, the trustee of Tower Real Estate Investment Trust (Tower REIT), for RM132.34 million.

Menara ING is a freehold strata building. It has a gross floor area of 256,158 sq ft and a net lettable area of 160,413 sq ft — excluding the sixth and eight floors of the tower block and the first and second floors of the annexe block, which have different owners. The part of the strata property that has been sold is being occupied by tenants such as Tan Sri Desmond Lim Siew Choon’s Khuan Choo Realty Sdn Bhd and one of Tan Sri Francis Yeoh’s YTL companies.

AmTrustee had originally acquired the asset in 2007 from ING for RM75 million and in 2010, it bought a further 9,018 sq ft for RM6 million. The net book value of the property was RM101.5 million as at Dec 31, 2013.

The sale and purchase agreement between Goldstone Kuala Lumpur and AmTrustee was entered into in December last year and the purchaser had on Jan 30, 2015, submitted a proposal to DBKL seeking permission to convert the 20-storey block cum annexe building into a hotel.

Industry sources say the new owner is planning to convert only a portion of the building into a hotel. Because the sixth and eight floors belong to others, the buyer is studying the possibility of the lower floors being retained as office space and converting the ninth floor onwards into a hotel. It may also introduce retail outlets on the ground floor.

Stanley Toh, director of real estate and valuation firm LaurelCap Sdn Bhd, says, “It is a good buy for Goldstone [Kuala Lumpur] as it paid RM700 per sq ft while the average price of office buildings in the vicinity is around RM1,000 psf. Although it is a strata property, it will provide the owner with a good opportunity to reposition it in the future,” he says. LaurelCap has been the manager of Tower REIT’s Menara ING for the past five years.

Meanwhile, data from the Companies Commission of Malaysia reveals that Goldstone Kuala Lumpur was incorporated in July 2013 and its core business is in “development of building projects for own operation, renting of space, hotels and resorts hotels, real estate activities with own or leased property”.

Its shareholders are Datuk Dr Tang Yong Chew (34.3%), Abd Rahman Md Noor (17%), Md Yusoff @ Mohd Yusoff Jafaar (17%), Mohamad Nazri Ismail (17%) and Sa-Li Chou @ Sally Chou (14.7%). Chou and Tang are also directors of the company.

It appears that the duo are also involved in another company called Goldstone Property (Malacca) Sdn Bhd. Tang and Chou hold a 70% and 30% stake respectively in the dormant company.

Interestingly, it was reported last month that Goldstone Property is building a 249-room hotel on a 0.7ha site in Jalan Bendahara, Melaka. Some RM200 million will be invested in the hotel, which will be under the ibis brand.

Tang and Chou, who share the same address, are also directors and shareholders of Winbond Properties Sdn Bhd. Tang has a 70% stake while Chou holds the rest of the equity interest in the company.

According to Winbond’s website, its first project is Wisma Longrich in Jalan Yap Kwan Seng.The website further states that the company has two other ibis hotel projects — ibis KLCC, a 678-room hotel in Jalan Yap Kwan Seng, and ibis Penang that will comprise both a hotel and hospital.

Tang’s name also appeared in December 2014 when Mah Sing Group Bhd and Topotels Sdn Bhd signed a deal that saw Mah Sing appointing Topotels to manage its Meridin Hotel Suites in Medini, Johor. Comprising two 27-storey blocks with studio, one and two-bedroom suites, the hotel is in Phase 2 of [email protected].

Other hotels under Topotels’ management include Ramada Encore in Seminyak, Vio Hotel in Bandung and Azana Hotel in Padang, all of which are in Indonesia, as well as The Straits Hotel & Suites in Melaka.

Topotels in Malaysia is majority owned by PT Topotels Investama Mandiri (60%) and Tang (27.6%). Other shareholders are Brian Prem Raj S Dorairajah (6.4%), Ang Keng Lye @ Ang Seh Han (3%) and Ooi Gim Chew (3%).

It is worth noting that there have been several developments in the Golden Triangle recently, apart from the sale of Menara ING. Wisma Genting has been put up for sale by Genting Malaysia Bhd while an empty parcel measuring 0.46 acres located between Wisma Goldhill and Wisma MPL is also up for sale.


This article first appeared in The Edge Malaysia Weekly, on February 16 - 22, 2015.