Ekovest to keep EkoCheras Mall for planned REIT, says chairman

KUALA LUMPUR (July 19): Ekovest Bhd does not intend to sell its EkoCheras Mall as it plans to keep it for recurring income and to group it with other properties that provide recurring income, like the group’s RM4 billion River of Life project, to form a real estate investment trust (REIT), said its executive chairman Tan Sri Lim Kang Hoo (pictured).

“We will include other properties with recurring income along the way, like River of Life. Those with recurring income will be parked under [the] REIT company,” said Kang Hoo.

In February, Malaysian Resources Corp Bhd (MRCB) announced that it had exited the River of Life project by selling its 40% stake in project delivery partner Ekovest-MRCB JV Sdn Bhd and Ekovest-MRCB Construction Sdn Bhd to Ekovest Bhd for RM8.5 million.

Ekovest managing director Datuk Seri Lim Keng Cheng, however, said there is no specific timeline for the REIT to be realised and will wait for a good time.

They were both speaking to reporters after Ekovest signed up 17 key tenants for its EkoCheras Mall yesterday. Among them were Golden Screen Cinemas, Village Grocer, Borders Books, Starbucks and Coffee Bean. The mall is scheduled to be completed by the first quarter of 2018.

Keng Cheng said the take-up rate of the mall is at about 50% to 60%. He expects the mall to be fully occupied when it opens.

EkoCheras Mall will have 4,300 parking bays and about 250 retail outlets, with some 625,000 sq ft of net lettable area. The mall is located in EkoCheras, the group’s RM2.11 billion, 12-acre (5ha) mixed-use development that comprises serviced apartments, office suites, hotel suites and a retail component.

Meanwhile, on plans to monetise its highway concession, Kang Hoo said Ekovest is leaning more towards seeking a strategic partner to form a joint venture.

It was previously speculated that Ekovest was considering options to monetise its highway business — under which the Duta-Ulu Klang Expressway (Duke) tolled highway, which is going through extensions, is housed — either via a 30% stake sale or the flotation of its entire infrastructure arm.

As to speculations that tycoon Tan Sri Quek Leng Chan might participate in the Bandar Malaysia project by taking up a stake in master developer Iskandar Waterfront Holdings Sdn Bhd (IWH), Kang Hoo answered that the company is not talking to only one party but several, without confirming or declining the speculations.

A local daily reported in April, citing sources, that Quek could emerge as a substantial shareholder of unlisted IWH by acquiring a 20% stake in Credence Resources Sdn Bhd, Kang Hoo’s private vehicle. Credence Resources owns a 60% stake in IWH.

Kang Hoo is the largest shareholder of Ekovest with a direct stake of 20.19% and an indirect interest of 12.19%.

Datuk Haris Onn Hussein, the brother of Defence Minister Datuk Seri Hishammuddin Hussein Onn, has an indirect stake of 13.84% in the company, held via Kota Jayasama Sdn Bhd.

Separately, Ekovest, which has been awarded the concession for the construction and management of the proposed Setiawangsa-Pantai Expressway, formerly known as Duke Phase 3, is planning to raise up to RM3.64 billion via sukuk to part-finance the project’s cost.

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This article first appeared in The Edge Financial Daily, on July 19, 2016. Subscribe to The Edge Financial Daily here.