Thursday 28 Mar 2024
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KUALA LUMPUR: Quill Capita Trust (QCT), which sees the emergence of Malaysian Resources Corp Bhd (MRCB) as its largest shareholder with a 41% stake following a deal with CapitaLand RECM Pte Ltd and Coast Capital Sdn Bhd, said it will keep the existing senior management team largely intact.

“The management team will pretty much remain the same, perhaps with just one or two changes. But that is up to the new board (of directors),” Yong Su-Lin (pic), the interim chief executive officer of Quill Capita Management Sdn Bhd (QCM) — the manager of QCT — told a press conference after the group’s extraordinary general meeting yesterday.

Earlier at the meeting, QCT (fundamental: 0.55; valuation: 3) unitholders approved the real estate investment trust’s (REIT) acquisition of Platinum Sentral here from MRCB for RM740 million. The sum will be satisfied via RM476 million in cash and RM264 million via a unit swap at RM1.28 per unit in QCT.

The asset injection by MRCB into QCT will see the property developer emerge as the biggest shareholder of QCM. This will be followed by Quill Resources Holding Sdn Bhd with a 39% stake and Global Jejaka Sdn Bhd with a 20% equity interest.

With MRCB on board, Yong said QCM will appoint a new board once QCT’s acquisition of Platinum Sentral is completed within a month. The new board will have three representatives from MRCB, two from the Quill group, one from Global Jejaka and three independent directors.

According to Yong, the acquisition will boost QCT’s position to the eighth largest REIT in Malaysia and allow it to tap into a pipeline of commercial buildings as future acquisition targets.

As part of QCT’s acquisition of Platimum Sentral, QCT is entitled to a right of first refusal to purchase any office buildings to be disposed of by MRCB and the Quill group. 

Yong said QCT is eyeing assets owned by its two main sponsors, MRCB and the Quill group worth approximately RM1.8 billion as targets to grow its total asset size.

“We started with RM868 million (in terms of value of total assets). When we acquired Platinum Sentral, it doubled to RM1.6 billion. Ideally, we would like to double that too. We will pace it out to one or two years. We have not commenced active negotiations with the sponsors but what I can say is that MRCB and Quill have existing buildings for the (acquisition) pipeline. MRCB owns the Shell tower and Ascott Sentral. The Quill group has Quill Building 6, Quill Building 9 and Quill Building 18,” said Yong.

“We are predominantly an office REIT. So, we will maintain ourselves as an office REIT unless the board decides to change the business direction. With regards to the office supply coming out into the market, we are always engaging with our tenants as part of our tenant retention programme. At the moment, our occupancy rate is 91%. When we complete the acquisition of Platinum, we are looking at 92% occupancy rate.

“Once we complete the disposal of Quill Building 10, our occupancy rate will be 96% to 97%. This is way above the market average of 83%,” she added.

 

This article first appeared in The Edge Financial Daily, on March 13, 2015.

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