KLCCP seeks tenants for new projects

KUALA LUMPUR: Kuala Lumpur City Centre Property Holdings Bhd (KLCCP) is focusing on the ongoing development of its prime assets, Lot D1 and Kompleks Dayabumi, according to CEO Hashim Wahir.

The group is considering a mixed development on Lot D1 with 80% comprising  offices and 20% retail elements. Hashim said the group is in the process of securing anchor tenants for Lot D1, which is located on a 1.4-acre plot opposite the Mandarin Oriental Hotel here.

“I can only give you the gross development value once we have completed the master plan and know the quantum of rental our tenants are willing to pay,” he said after the listing ceremony of KLCC stapled Real Estate Investment Trust (KLCC REIT) on Bursa Malaysia yesterday.

On redeveloping Kompleks Dayabumi, Hashim said there are several plans, including re-positioning retail space and adding more office space. A hotel was mooted as a possibility and the estimated time frame given for the redevelopment is four years.

The landmark 35-storey Kompleks Dayabumi is the former headquarters of Petroliam Nasional Bhd (Petronas). The tower was completed in 1984 and features Islamic-inspired architecture on its facade.

The two properties are part of the newly structured KLCC stapled REIT, which is the largest of its kind in Malaysia. The group’s portfolio is collectively valued at RM15 billion, and is three times larger than its nearest REIT competitor. Hashim is bullish about KLCC REIT’s prospects.

“We have received many enquiries from institutional fund managers. With our asset class, we expect to gain the attention of high-quality investors. The investors will take notice of our commitment for a 90% distributable income payout to shareholders,” he said.

Under the listing, Petronas Twin Towers, Menara 3 Petronas and Menara ExxonMobil are housed under KLCC REIT. Other assets — Suria KLCC, Menara Dayabumi and Mandarin Oriental Hotel — remain under KLCCP.

The majority of KLCCP properties are in the KLCC precinct, which is well-known as the capital’s commercial, shopping and entertainment hub.

The stapled structure of the REIT consolidates the existing KLCCP shares with KLCC REIT units, resulting in the company being a single listed entity. The rationale behind the structure is to unlock value for existing shareholders while retaining the full ownership of current assets.

It also enables the company to maximise the distributable income to shareholders by combining its dividend and the REIT’s distribution per unit. KLCC REIT made strong gains on its first day of listing, rising nearly 7% in intraday trade. The stock closed at RM7.68 yesterday, a 43 sen premium over the initial reference price of RM7.25.

This article first appeared in The Edge Financial Daily, on May 10, 2013.