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REAL estate investment company Pelaburan Hartanah Bhd (PHB), which has commercial assets and land worth over RM5 billion, is planning to sell close to 790 acres of land it owns in Ulu Bernam, Selangor, documents obtained by The Edge show.

According to industry estimates, the value of land in the area, located 18km south of Proton City in Tanjung Malim, is around RM6 psf. This means PHB may be able to sell its tract for as much as RM206 million.

If the sale goes through, it will be PHB’s first asset divestment, say industry players.

The tract, comprising seven contiguous parcels, is located within the Escot Estate and borders Tanjung Malim in Perak. The lease on three parcels, measuring a total of 781.07 acres, expires in July 2113. The remaining 7.93 acres — four parcels — are freehold.

The documents, titled “For sale by expression of interests (EOI)”, reveal that global real estate service provider Savills (M) Sdn Bhd has been appointed to look for buyers. Unlike a sale by tender, an EOI is non-binding — both parties have the option to not proceed with the deal.

When contacted, Savills associate director of capital markets Nabeel Hussain confirms that the company is the exclusive agent for the proposed sale. However, he declines to give more details.

When asked about the matter, PHB group managing director Datuk Kamalul Arifin Othman also declines to comment.

According to the documents, a portion of the tract has been designated as “residential”. The bulk of the land, however, is for agricultural use.

Nevertheless, PHB has submitted an application to the Hulu Selangor District Council to rezone the entire site to a mix of industrial, commercial, institutional and residential. “The initial feedback from the authorities has been encouraging,” the documents state.

Land not designated as “agricultural” can be purchased by foreigners.

According to real estate agents, while there has been frequent news on PHB’s asset purchases, they could not recall a time when the investment company divested any of the assets that it had purchased.

Since its establishment in 2006, PHB — a wholly-owned subsidiary of Yayasan Amanah Hartanah Bumiputera — has bought 18 buildings with a total floor area of 7.06 million sq ft. Its earlier acquisitions include Menara Bumiputra-Commerce in Jalan Raja Laut, Kuala Lumpur; CP Tower in Section 16, Petaling Jaya; and Wisma Consplant in Subang Jaya.

Last year, PHB went on an acquisition trail, snapping up The Shore Shopping Gallery in Melaka, Quill 18 in Cyberjaya and Linde (M) Sdn Bhd’s manufacturing plant in Petaling Jaya. It also bought a 51% stake in Nu Sentral Sdn Bhd for RM119.77 million, making the operator of Nu Sentral mall a wholly-owned subsidiary.

PHB’s projects under construction include the 32-storey d’Pristine Tower @ Medini Nusajaya in Johor Baru; 1,967 parking bays at Icon City, Petaling Jaya; the 18-storey Block H at Empire City Damansara; and the 20-storey Tower 6 @ Sky Park Cyberjaya.

The company also has several land parcels in Cyberjaya and Klang as well as a 10.8-acre site in Terengganu, which it bought last year.

According to sources, PHB plans to focus on two of its developments in KL — the former Unilever site in Bangsar and the former Kuala Lumpur Regional Centre for Arbitration land in Jalan Conlay — and work has commenced on the sites.

The 19.6-acre Bangsar parcel, known as Lot 20001, will be developed into a mixed-use project with a gross development value (GDV) of between RM4 billion and RM5 billion. This site used to be the headquarters and factory of Unilever (M) Holdings Sdn Bhd.

As for the Jalan Conlay land, sources say it will also see a mixed-use development. The 6.8-acre parcel was purchased in 2012. A back-of-the-envelope calculation puts the GDV at between RM3.5 billion and RM4 billion.

A real estate player believes that proceeds from the proposed sale of the Ulu Bernam land will be used for the two massive developments.

The closing date for the EOI is Nov 2. Should the deal go through, the earliest the sales and purchase agreement could be signed is January next year and the sale completed in April.

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This article first appeared in The Edge Malaysia on Oct 3, 2016. Subscribe here for your personal copy.

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