Friday, August 21, 2015

Quek dispose of property project in Beijing, China.

By The Star

Malaysian billionaire Tan Sri Quek Leng Chan, who is known for his savvy investment moves, is selling a property development project in Beijing – held under Singapore-listed GuocoLand Ltd – to a state-owned distressed asset management company in China for 10.5 billion yuan (RM6.79bil).

In a filing with the Singapore stock exchange, GuocoLand announced that its unit, GuocoLand (China) Ltd, had entered into an agreement with China Cinda Asset Management Co Ltd’s Beijing branch Office for the disposal of all the equity, contractual and loan interests of GuocoLand group in or relating to the integrated mixed-used development.

The Singapore-listed GuocoLand is 65.2%-owned by Hong Kong-listed Guoco Group Ltd. Both stocks were suspended yesterday. Quek controls 76.12% of the latter.

The mixed-used development project is located in the Dong Cheng district of Beijing City in China and has a useable area of 91,287.7 sq m for office, commercial, apartment and underground parking lot purposes.

According to the filing, the aggregate consideration for the transaction amounting to 10.5 billion yuan comprised 4,563,116,000 yuan for the project rights and 5,936,884,000 yuan for the project liabilities.

“The said consideration is arrived at on a willing buyer, willing seller basis after arms-length negotiations and will be satisfied wholly in cash with 9.45 billion yuan paid upon signing of the agreement, and the balance payable on the last day of the 18th month from the date of the agreement or dealt with in accordance with the tax provisions in the agreement, as the case may be,” GuocoLand said in the statement.

According to the company, the net book value of the project as at June 30, 2015 was about 8.46 billion yuan or S$1.72bil. The deal is expected to generate a net gain of about 1.58 billion yuan or S$480mil.

It added that the net proceeds from the transaction would be used for the general working capital (including repayment of debts) of the GuocoLand group, and was an opportunity to realise the capital value of the said project.

China Cinda, which is listed on the Hong Kong Stock Exchange, also made a filing with the city’s regulator on the Beijing real estate asset purchase.

China Cinda is an asset-management services company that invests, disposes and manages non-performing assets and equity.

According to its announcement, the project is planned for a mix of shopping centres, an office building with twin towers, apartments and hotels.

GuocoLand is a major property developer in Singapore with notable developments in China, Malaysia and Vietnam.

According to its website, it has invested an estimated US$3bil in China, with a sizeable land bank of completed and uncompleted properties amounting up to nearly 2.5 million sq m of gross floor area spanning across major cities like Beijing, Shanghai, Nanjing and Tianjin.

The company reported a 130% surge in its third-quarter net profit to S$49.5mil in the three months ended March 31, 2015.

Guoco shares were last traded at HK$86.60 (RM45.95) for a market capitalisation of HK28.49bil (RM15.12bil). GuocoLand shares, meanwhile, were traded at S$2.04 for a market cap of S$2.48bil (RM7.06bil).

Both stocks are part of the Hong Leong group, one of South-East Asia’s largest corporations.

Guoco Group holds a multitude of companies in the financial services sector, hospitality and leisure and gaming. Besides GuocoLand, it also has 66.5% in Guoco Leisure Ltd, which is also listed in Singapore, and a 25.4% stake in Bursa Malaysia-listed Hong Leong Financial Group Bhd (HLFG) and 65% in Guocoland (M) Bhd.

HLFG, in turn, has a direct 64.4% stake in Hong Leong Bank Bhd and 81.3% in Hong Leong Capital Bhd, among others.

Quek, who is Guoco chairman, had tried to privatise Guoco a few years ago but failed. This is despite him upping the offer price from the initial HK$88 in December 2012 to HK$100 in April 2013.

Thursday, August 06, 2015

Lai Meng School Land up for sale again for RM400mil

Well guys, remember Magna Prima bought the Lai Meng school land back in 2009 for RM148.2mil cash? Now they are selling away the land for RM400mil and seem like they are not keen to develop the land.

By The Star Online

Magna Prima Bhd’s Lai Meng school property, located along Jalan Ampang, is still up for sale. It is looking for offers from interested buyers within a timeframe of about 1½ months.

Yesterday, the marketing agent of the real estate, Rahim & Co, put up an expression-of-interest advertisement to sell the 2.62-acre (1.06ha) parcel.

James Goh of Rahim & Co’s investment section told StarBiz: “While we have a target price of about RM3,500 per sq ft (psf), we are open to all reasonable offers.”

Interested parties can stipulate the terms and make the offer by 5pm on Sept 22.

Goh said a few big developers had called up to enquire about the sale since the advertisement came out.

At RM3,500 psf, the buyer will have to fork out about RM400mil for the land.

“The demand for development land in prime locations is still holding up well. This kind of opportunity doesn’t come by often,” he explained about the land which is 300 meters from KLCC.

The freehold land comes with approval for offices, a hotel and/or serviced apartments at a plot ratio of 1:12.

Earlier this year, Rahim & Co had managed to sell 1.87 acres previously owned by the German Embassy to Malaysian Resources Corp Bhd (MRCB) for RM3,188 psf.

MRCB had paid RM259.16mil for the parcel along Jalan Kia Peng through a tender process.

That said, observers noted that the challenging market conditions might hold buyers back from making the investment.

Developers would have to make serious considerations of what they want to do with the land because there is sufficient supply of houses in the vicinity, while there is still a glut in office space in Kuala Lumpur.

But Goh is optimistic of getting a buyer due to its strategic location.

Previously, StarBiz had reported that Retirement Fund Inc was interested in buying the land in April.

The pension fund had offered about RM3,300 psf, but Magna Prima’s group managing director Datuk Wira Rahadian Mahmud Mohammad Khalil told reporters that both parties had discussed the deal but it wasn’t finalised.

With the appointment of Rahim & Co as the developer’s exclusive marketing agent, the land deal could be done in a more proper and coordinated manner, Goh explained.

Magna Prima had bought the land five years ago for RM1,350 psf or RM148.2mil cash.

Back then, Magna Prima had also transferred 5.5 acres to the Lai Meng Girls’ School Association and agreed to bear the construction cost of the new campus, which ranged from RM20mil to RM30mil.

The Bukit Jalil land had cost the small-cap developer RM10mil.

Before the land sale, the developer, which has a market cap of RM366.2mil, had intended to carry out a mixed project with a gross development value of RM1.8bil.

Dubbed the Iconic Towers, the proposed project would be made up of two 60-storey towers, one of which is a mixture of serviced apartments, a hotel and offices, while the other is a grade A office with Green Building Index features.

Development of the project would cost a lot and the company decided to strengthen its balance sheet and re-focus on other niche projects. It also planned to sell a 20-acre parcel in Shah Alam and a seven-acre plot in Petaling Jaya.