KUALA LUMPUR: Datuk Desmond Lim Siew Choon, executive chairman of Malton Bhd and chairman of Pavilion REIT, is believed to have strengthened his foothold in prime Pusat Bandar Damansara (PBD) in Kuala Lumpur, following the acquisition of a 2.57ha tract within the area by a company linked to the property tycoon.
Yesterday, Selangor Properties Bhd announced it had sold the tract for RM450 million or RM1,628 per sq ft to Jendela Mayang Sdn Bhd, with the former making a gain of RM376.2 million.
Lim already owns 3.88ha in PBD via Impian Ekspresi Sdn Bhd, which plans to redevelop the area. Following yesterday’s acquisition, the entire development could be worth more than the initially estimated RM3 billion gross development value for 11 buildings.
In a filing with Bursa Malaysia yesterday, Selangor Properties stated that Jameson Pias @ Zainal Pias owns 40% of Jendela Mayang. Jameson was a former director of Urusharta Cemerlang Sdn Bhd, a company linked to Lim which owns and operates the Pavilion Mall.
According to online checks by The Edge Financial Daily yesterday, it is learnt that Jendela Mayang and Urusharta Cemerlang Sdn Bhd share the same registered address in Menara ING, Kuala Lumpur and company secretary, Lim Mei Yoong.
Jameson still serves as director in a number of other companies linked to Lim, including Urusharta Cemerlang (KL) Sdn Bhd, Urusharta Cemerlang Development Sdn Bhd and Jerantas Sdn Bhd.
Jerantas, one of Lim’s projects, is building the world’s first Harrods hotel — to be connected by an overhead bridge to the Pavilion Mall.
PBD is expected to benefit from two nearby mass rapid transit (MRT) stations — Semantan and Pusat Bandar Damansara — to be completed by 2017.
Selangor Properties also said that under the land acquisition deal, Jendela Mayang will assume all of the group’s rights and obligations to design and construct an entrance portal, lay-by facilities, and parking facilities for the MRT stations on the lot. The transaction is subject to approval by MRT Corp Sdn Bhd for the novation of these rights and obligations.
Meanwhile, the land’s price of RM450 million is more than four times its net book value of RM108.2 million as at Oct 31, 2013.
An independent valuer for Selangor Properties valued the freehold land categorised for commercial use at RM300 million.
Selangor Properties acquired the land in December 1995 for RM106.6 million. The land currently serves as a car park and generates RM433,500 in parking income per year.
Selangor Properties plans to use RM237 million of the proceeds for repayment of its borrowings within a year and RM212.5 million for working capital and acquisitions within three years. The full repayment of borrowings is expected to save the group RM14.2 million in annual interest.
It said as the disposal is expected to be completed by the first quarter ending Oct 31, 2015 (FY15), it is not expected to have any material effect on the group’s earnings for FY14.
It will also not have any effect on the group’s issued and paid-up share capital and substantial shareholdings in the company.
This article first appeared in The Edge Financial Daily, on March 04, 2014.
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