Seal accepts proposed master lease to develop and lease back Aeon shopping centre

KUALA LUMPUR: Seal Incorporated Bhd, via its subsidiary Seal Lifestyle Development Sdn Bhd (SLD), has on principle accepted the proposed master lease from Aeon Co (M) Bhd to lease out the yet-to-be-built Aeon Shopping Complex in Bayan City Penang, it announced on Bursa Malaysia on Tuesday, Sept 7.

The group, which mainly engages in timber-logging, saw-milling, property development and property management, has agreed to lease out the property, which comprises a shopping centre and car parks that would be partially built on three parcels of land.

The estimated total development cost (TDC) for the mall is RM146 million.

Under the terms of the lease, SLD will build the shopping mall and car park lots according to Aeon’s specifications and design. Upon the completion of the premises, it will obtain a certificate of completion and compliance (CCC) and lease the property back to Aeon to operate as a shopping complex.

Further terms and conditions for the shopping mall's operation will be subject to agreement between the two parties.

The tenure of lease will initially span 10 years, with an option of three renewal terms of five years each.

The rental yield to be paid by Aeon will be 10.5% as the commencing yield for the initial term against actual TDC. It will then be reviewed every five years at not more than 10% of the previous term's rent.

Seal said the lease is expected to boost its earnings per share.