KLCC Property eyes up to RM1b acquisition

KUALA LUMPUR: KLCC Property Holdings Bhd (KLCCP) plans to acquire more assets in Kuala Lumpur’s Golden Triangle this year, after receiving shareholders’ nod to issue new shares of up to 10% of its share capital — to raise up to RM1 billion.

Group chief executive officer Datuk Hashim Wahir (pic) said the property developer will scout for prime assets in the Golden Triangle that would optimise shareholder value.

“We have sufficient headroom [for more land acquisitions] and we are now open to look at assets that will meet shareholder value accretion in terms of asset value, and that will give us the increase in terms of distribution,” he told reporters after the group’s annual general meeting yesterday.

Hashim said the group will have the capacity to fund acquisition of “a single asset of up to RM1 billion”, adding that KLCCP has reduced its gearing to 17% with headroom to borrow up to RM5 billion.

Last year, KLCCP undertook a corporate restructuring exercise which involved the restructuring of KLCCP Group into a stapled structure known as KLCC Stapled Group where the existing shares in KLCCP are stapled together with the units in KLCC Real Estate Investment Trust (KLCC REIT) to form the resultant KLCC Stapled Group.

On May 9, 2013, KLCC Stapled Group was listed under the REIT sector of the Main Market of Bursa Malaysia as the first-ever syariah stapled REIT structure.

The new stapled security structure has promised to pay more than 95% of its distributable income from KLCCP and KLCC REIT as dividends, said Hashim, which brings its total dividend declared for the financial year ended Dec 31, 2013 (FY13) to 28.9 sen.

Investors who have been investing in KLCCP stand to receive a net dividend yield of 4.95% for FY13, he added.

Following the restructuring exercise, the Petronas Twin Towers, Menara 3 Petronas and Menara ExxonMobil — all of which are wholly owned by Petroliam Nasional Bhd (Petronas) — are now under KLCC REIT, while the remaining assets including Suria KLCC, Menara Dayabumi, Mandarin Oriental Hotel and Lot D1 remain under KLCCP.

Hashim said KLCCP is still on the prowl to secure an anchor tenant for Lot D1, which is an undeveloped parcel of land located in the vicinity of the Kuala Lumpur City Centre, covering 5,726 sq m (1.5 acres or 0.61ha) in front of the Mandarin Oriental Hotel.

The value of KLCCP’s assets now stands at RM14.1 billion.

On plans to refurbish Menara Dayabumi, he said the group is looking to build a 60-storey tower on the site on which a six-storey office and retail podium called City Point is currently situated.

Renovation works are expected to commence in the middle of next year, he added, noting that it would take at least four years to complete.


This article first appeared in The Edge Financial Daily, on April 18, 2014.