Dr Yu’s YNH to build a Hilton hotel

KUALA LUMPUR: YNH Property Bhd, which is 32.15% controlled by its chairman and executive director Datuk Dr Yu Kuan Chon, is roping in US hotel chain Hilton to manage a proposed five-star hotel at its Menara YNH development in Jalan Sultan Ismail here. 

In a filing with Bursa Malaysia yesterday, the Perak-based property developer said it had on Wednesday signed a memorandum of understanding (MoU) with Hilton Worldwide Manage Ltd for the latter to manage its Hilton Kuala Lumpur City Centre & Residences.

“Any new developments arising from the above MoU will be announced from time to time,” YNH (fundamental: 0.6; valuation: 1.6) said.

Yesterday’s announcement could mark that YNH is finally set to work on its long-delayed RM3.4 billion mixed development here. It was reported that the proposed project, which will comprise a hotel, offices and retail outlets, was initially supposed to be an iconic office tower development known as Menara YNH.

The group has reportedly been looking to secure either a five- or six-star hotel operator as well as a reputable anchor tenant for a mall within its 1.2ha site since June last year.

Nevertheless, YNH had previously disappointed investors with delays and changes to its plan and its partners for the Menara YNH development.

To recap, YNH first bought the land from Pengurusan Danaharta Nasional Bhd in July 2004 for RM63 million to develop a 55-storey office block, two 56-storey serviced apartment blocks and a 50,000 sq ft retail podium. The gross development value of this project was said to be RM880 million.

In December 2006, YNH announced that it had formed a tie-up with Singapore property giant CapitaLand Ltd for the project. The two companies signed a MoU to jointly develop Menara YNH on a 60:40 basis. The construction itself should have begun in mid-2007 and been completed by end-2011. However, in June 2007, the MoU lapsed.

In January 2008, YNH found a new partner in Kuwait Finance House (Malaysia) Bhd (KFH). The plan was to sell half of the Menara YNH project to KFH at RM1,230 per sq ft or RM920 million for 750,000 sq ft. At the time, the price tag represented a record sale price.

However, the deal fell through in the wake of the 2009 global financial crisis. Eventually, KFH decided to pull out before the formalisation of a sale and purchase agreement.

Following the two failures, YNH has taken its time and stayed under the radar regarding the development of Menara YNH.

Apart from its latest quarterly financial report for the period ended Sept 30, 2014, which stated that it had obtained an “approved development order … for this development, comprising office tower and shopping mall”, information on the project has not been forthcoming.

Among YNH’s largest shareholders are Kuan Chon, who holds a 15.71% direct interest and 16.44% deemed interest in the group, followed by Datuk Yu Kuan Huat, who has a 12.62% direct stake. Kuan Chon is well known for thwarting Tan Sri Quek Leng Chan’s attempt to privatise Hong Leong Capital Bhd in 2013.

YNH’s share price closed down two sen or 1.02% at RM1.95 yesterday, giving it a market capitalisation of RM809.17 million.

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This article first appeared in The Edge Financial Daily, on February 6, 2015.

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