MGPA sees strong interest in its landmark project

KUALA LUMPUR: MGPA Asia Developments (MGPA) is in talks with two multi-national companies for an anchor tenant position for an office tower in its landmark redevelopment project in Jalan Tun Razak, said a top company official.

The project, known as Intermark, involves an extensive refurbishment initiative to transform the former 62-storey Empire Tower into a “Grade A” office building. It has been renamed Tower 1, and work on the exterior refurbishment was completed at the end of last year.

“Occupancy rate for Tower 1 is still low at the moment, with only 30% to 40% of the office block occupied, but many companies, especially those from the multinationals and energy sector, have shown strong interest.  

“With the upgrade now almost completed, the rental rate of Tower 1 has now gone up to RM7 to RM9 psf (per square foot) from around RM7 psf previously, in line with the rental rate of other offices of similar standard in the locality,” said the official who declined to be named.

MGPA is an independent private equity real estate investment advisory firm which focuses on Europe and Asia. Based in Bermuda, it currently manages around US$11 billion (RM37 billion) in assets, including development and redevelopment projects, joint ventures and real estate companies in the office, retail, industrial, residential and hotel sectors.

Pharmaceutical healthcare group Roche Malaysia, a unit of Switzerland-based Roche Holding AG, recently signed up as one of the key tenants for Tower 1, taking up three floors totalling 34,500 sq ft of office space.

MGPA announced its maiden investment in Malaysia’s real estate sector in February last year, with an investment of RM2 billion, including acquisition and construction cost for the redevelopment of Empire Tower, City Square, the Crown Princess Hotel and Plaza Ampang.

Plaza Ampang and City Square were acquired in June 2007 at a cost of around RM760 million, and refurbishment work started in early 2009.  

Other developments include the country’s first Doubletree Hotel by Hilton on what was formerly The Crown Princess hotel, and a new retail outlet known as Intermark Mall on the former City Square shopping centre. Both are expected to have their soft openings in April.

Intermark Mall has around 200,000 sq ft of retail space, and several supermarket operators have expressed interest to be the anchor tenant once the retail portion of the project is ready.    

The development will be integrated with a 30-storey high-end new office tower, The Integra, to be built on the site of Plaza Ampang.  It is scheduled to be ready by the end of 2012, and would complete the entire project, transforming the area into another integrated commercial enclave in the city.

This article appeared in The Edge Financial Daily, Jan 18, 2010.