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Putra Place: Federal Court dismisses Metroplex's appeal

PUTRAJAYA (Feb 21): The Federal Court has dismissed the application by Metroplex Holdings Sdn Bhd (Metroplex) for leave to appeal to the Federal Court against the High Court's and Court of Appeal's decision that amongst others declared OSK Trustees Bhd — as trustee of Sunway Real Estate Investment Trust — the legal owner of Putra Place and that control and possession of Putra Place be delivered to Sunway REIT Management Sdn Bhd (as manager for Sunway Real Estate Investment Trust), Sunway REIT Management said in a statement on Monday.

On June 28, 2011, the High Court decided that OSK Trustees is the legal owner of Putra Place and ordered Metroplex to amongst others hand over control and possession of Putra Place to the REIT manager. Metroplex's appeal to the Court of Appeal against the High Court's decision was dismissed by the Court of Appeal on Sept 27, 2011.

To recap, Putra Place (now renamed Sunway Putra Place) was acquired by the Trustee on behalf of Sunway REIT through a public auction in March 2011 for the price of RM513.9 million. The transaction was one of the largest transactions in a public auction in Malaysia. The Manager obtained possession of Sunway Putra Place on Sept 28, 2011 upon the Court of Appeal's dismissal of Metroplex's appeal.

The Federal Court dismissed Metroplex's application for leave to appeal as it did not find that there was any question involving a general principle of law or matters of public interest that needs to be decided by it, said the manager.

With the dismissal of the application, the Trustee and the Manager intends to enforce the remaining parts of the High Court's Order dated June 28, 2011 that have not been enforced, which include orders that Metroplex is to pay damages and/or aggravated damages including mesne profits together with interest, to be assessed from April 19, 2011 until possession was delivered up; to pay all income and receipts derived or received by it from Putra Place since 19 April 2011 and; to pay damages to be assessed.

Sunway REIT Management said there was some resistance from the occupiers initially during the period where the ownership of Putra Place was being challenged. It has however, convinced most of the occupiers to continue as tenants, it added.

As at Dec 31, 2011, Sunway Putra Mall achieved an average occupancy rate of 79.8% while Sunway Putra Tower's average occupancy was 90.4%. Meanwhile, the Sunway Putra Hotel's average occupancy grew close to 60% compared to 20% when the Manager took possession on Sept 28, 2011.

"We see huge enhancement and turnaround opportunities for the properties. The Manager is embarking on a repositioning and rebranding exercise for Sunway Putra Place in bringing back the glory of Sunway Putra Mall being a preferred shopping destination for local visitors and tourists. A major refurbishment for Sunway Putra Mall will be undertaken to rejuvenate the architecture of the mall to appeal to the current market trends. The refurbishment exercise is also expected to result in increase of net lettable area for Sunway Putra Mall," said Sunway REIT Management.

The manager is in the final stage of finalizing the refurbishment plan for Sunway Putra Place and will update these plans in due course.

Sunway REIT was listed on the Main Market of Bursa Malaysia Securities Bhd on July 8, 2010, and is the country's largest retail focused REIT in terms of asset size and market capitalisation as at Dec 31, 2011. Assets in Sunway REIT comprise of shopping mall, hotel and office that are located in Bandar Sunway, Kuala Lumpur, Seberang Jaya and Ipoh.

Sunway REIT's market capitalisation is RM3.36 billion and total assets valued at RM4.47 billion as at Dec 31, 2011.

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