The RM333 million deal to acquire a portion of the 1 Mont’Kiara mixed commercial development by ARA Asia Dragon Fund — an affiliate of Hong Kong tycoon Li Ka-Shing-linked Cheung Kong Group — from Ireka Corp Bhd’s subsidiary London Stock Exchange-listed Aseana Properties Ltd was completed on Dec 31, 2010.
The portion comprises a 20-storey office tower with a net lettable area of 185,000 sq ft and a five-storey retail mall with a gross floor area of 225,000 sq ft, with an estimated total gross development value of RM529 million.
The project was jointly developed by Aseana Properties and private equity fund MCDF Investment Pte Ltd, which is managed by CapitaLand Financial Ltd. The deal grabbed headlines in the middle of last year, when news first broke of the proposed disposal to the fund. The office was sold at approximately RM550 psf, while the retail section was sold at about RM1,040 psf, setting new pricing benchmarks for the upscale enclave.
The 1 Mont’Kiara retail mall opened for business last December and 60% of its retail space has been taken up. The leasing rates range from RM4 to RM40 psf, a spokesman with the mall management tells City & Country.
With the mall targeted at Mont’Kiara residents, the tenant mix is expected to comprise lifestyle outlets, fashion, F&B and novel concept restaurants, according to earlier reports.
Anchor tenants now include gourmet food supermarket Village Grocer, gymnasium Fitness First, home furnishing and electrical appliance store Harvey Norman and children’s gymnasium Young Explorer.
Meanwhile, 30% of the 20-storey office tower has been leased since the middle of last year, largely to consultancies and property developers.
The other portion of the 1 Mont’Kiara development comprises a 34-storey office tower with 186 office units. Of that, 185 units have been sold to individual investors, according to Aseana Properties in an announcement to the London Stock Exchange on July 21, 2010.
Zerin Properties CEO Previndran Singhe says: “It is actually a decent buy for ARA considering that prices have moved since the execution of the sale and purchase (S&P) agreements.” Zerin Properties was the agent that concluded the deal.
“Moreover, with Mont’Kiara being a developed, affluent community and a well-linked location, the mall is bound to do well with its immediate catchment,” he adds.
Previndran says corporate entities, professional services and financial services will seek the office units, which average 11,800 sq ft in size.
“Leasing has already commenced and will take the next few months to get more tenants in,” he says.
SK Brothers Realty general manager Chan Ai Cheng says the acquisition price paid by the fund reflects the property prices in the area and is comparable with Petaling Jaya’s newer office developments.
She says the price paid for 1 Mont’Kiara’s retail space is comparable to those in Petaling Jaya’s Jaya One, Dataran 3 Two and V Square, while the price for its office space is similar to the PJ8 and PJX office developments, which range from RM400 psf to RM600 psf.
She believes the foreign investor would not have considered acquiring the project without first carrying out due diligence.
“1 Mont’Kiara has the ingredients to make it work. There is the composition of offices and retail areas, as well as the residential developments in the area. It is also a prime market with its location and catchment,” she says.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 842, Jan 24-30, 2011
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