KUALA LUMPUR: KPJ Healthcare Bhd’s wholly-owned unit, Kumpulan Perubatan Johor Sdn Bhd (KPJSB), is exercising its option to purchase Menara 238 in Jalan Tun Razak for RM206 million.

KPJ said that in September 2012 it had entered into a tenancy agreement with the registered owner, Danaharta Hartanah Sdn Bhd, and is now exercising the option in the agreement to purchase the entire building.

The purchase will be funded mainly by external borrowings and internally generated funds, it said.

KPJSB is an investment holding company, which provides management services to its subsidiaries, and health screening services. The principal activities of the subsidiaries are in the operation of specialist hospitals.

“KPJ plans to move all non-revenue generating services that are occupying KPJ hospitals to the building, giving the hospitals opportunity to utilise more space to generate more revenue. Menara 238 suits all the purposes outlined by KPJ,” said the healthcare provider in a Bursa Malaysia filing yesterday.

“The company views it has the capacity to manage and turn the property into a revenue centre on its own through its strategy of attracting the right tenants, hence maximising its rental income,” it said.

KPJ said Menara 238, formerly known as Menara Marinara, underwent a complete refurbishment and the entire premises was converted from office, commercial and apartment use into commercial and office use.

The total land area is 2.05 acres (0.82ha). However, the area currently occupied by KPJSB is 74,750 sq ft or about 15% of the total lettable area.

According to Messrs CH William Talhar & Wong’s valuation report, as at March this year, the market value of the property was RM220 million.

KPJ said the acquisition, expected to be completed by the third quarter of 2014, is  a catalyst for its future expansion on its strength and niche in the country’s private healthcare industry.

“This property will serve as the headquarters and centre for aesthetics, alternative medicine, physiotherapy, rehabilitation, day care, laboratory and radiology services,” it said.

KPJ said there is potential for the property to be injected into a real estate investment trust with capital gains.

 

This article first appeared in The Edge Financial Daily, on October 18, 2013.

 

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