This article first appeared in The Edge Financial Daily, on October 19, 2015.
KUALA LUMPUR: A two-year-old mall-cum-hotel in Bandar Seri Iskandar, Perak has captured the attention of investors, including a listed real estate investment trust (REIT), sources said.
Setia Awan Properties Sdn Bhd — the owner of D Mall and D Hotel — is believed to have received offers of between RM110 million and RM130 million for both assets, which are located in Perak Tengah.
It is learnt that Setia Awan Properties has been receiving numerous unsolicited offers for the properties, particularly over the past year. Setia Awan Properties is a company linked to Setia Awan Holdings Sdn Bhd, an established property developer from Sitiawan, Perak, which is controlled by the Doh family.
Setia Awan Holdings has projects across Sitiawan, Senawang and Bandar Seri Iskandar that have a combined gross development value of RM1 billion.
Setia Awan Holdings could not be reached for comment.
According to sources, Hektar REIT may be eyeing D Mall and D Hotel.
When contacted, Zalila Mohd Toon, executive director and chief financial officer at Hektar Asset Management Sdn Bhd, the manager of Hektar REIT, did not deny nor confirm that the company is looking to acquire the properties.
“On the assets (D Mall and D Hotel) in Perak, we are constantly on the lookout for potential acquisition opportunities. As part of our asset management role, our team regularly assesses all asset acquisition opportunities that are brought to us at any time,” Zalila told The Edge Financial Daily.
“However, as of now, we have yet to firm up any acquisition plan that would substantiate an announcement to Bursa Malaysia. Should there be any good news, we will make the announcements accordingly,” she said.
“There are at least two offers [on the table],” a source familiar with the matter said, adding that Setia Awan Properties had never placed the two assets up for sale.
“The mall is doing very well. It has not been impacted by the imposition of the goods and services tax, and its performance is getting better every quarter. Similarly, the hotel is experiencing quarter-on-quarter growth,” the source said.
It is understood that the shopping centre is performing well because it is located in an area untapped by other mall operators and where population has been growing steadily, particularly from student numbers. The mall-cum-hotel is surrounded by Universiti Teknologi Petronas, Universiti Teknologi Mara Perak Campus, Institut Kemahiran Belia Negara and Kolej Professional Mara.
There is also a Tesco store operating nearby, while an Econsave Cash & Carry is under construction. Mydin Group has also purchased a parcel of land in the township for possible opening in two years. The Econsave building, incidentally, is being developed by Setia Awan Holdings.
Another source said the three-storey D Mall and the eight-storey D Hotel are linked and located on a leasehold parcel measuring 209,842 sq ft, with an open-air car park facility providing 330 parking bays.
Should Hektar REIT acquire D Mall and D Hotel, it will see the trust moving from being a pure-play retail REIT to one that includes hospitality.
Hektar REIT last year said it was keen to acquire malls in small towns.