AP Land may hand over 4 assets to buyer this quarter

By BUSINESS TIMES

PROPERTY developer Asia Pacific Land Bhd (AP Land) is on track to hand over its City Square Centre and Plaza Ampang properties to Australia’s Macquarie Global Property Advisors (MGPA) in the current quarter.

MGPA is buying City Square Centre, which comprises the 11-storey City Square shopping centre, the 61-storey Empire Tower office block and the 28-storey, 571-room Crown Princess Kuala Lumpur Hotel, for RM170 million, RM270 million and RM240 million respectively.

It is buying Plaza Ampang for RM80 million, spending a total of RM760 million for the total acquisition.

Sources told Business Times that MGPA, a private equity real estate fund advisory company, plans to refurbish the four assets as soon as the transaction is finalised.

“MGPA is planning a refurbishment programme that includes upgrading all the assets and renovating the hotel to meet international standards. It may initially spend some RM40 million to RM60 million for the plan,” a source said.

It is believed that Federal Hotels International, which manages The Federal Kuala Lumpur, Hotel Capitol Kuala Lumpur and The Grace hotel in Sydney, Australia, will continue to manage the hotel.

It, however, could not be ascertained if MGPA will retain all the present staff at the four properties.

The source said the value of the four properties could hit RM1.2 billion in three to four years because of plans by MGPA to raise its value, enhanced further by its location.

“That’s how much the properties had cost when the property market was more stable,” the source said.

AP Land, which is 32.4 per cent held by the family of Low Su-Ming, the group’s managing director, announced in August last year that it was selling its four properties to MGPA to par down its debts and plan for new expansions.

This is the first Malaysian investment for MGPA and it is already looking for further opportunities to invest here.

MGPA, which is focused on investments in Asia and the Europe, will pay for the four properties from its MGP Fund 11, a global real-estate fund, which closed in September 2005.

The fund has commitments of US$1.3 billion (RM4.43 billion), giving it a buying power of US$5 billion (RM17.05 billion) and has invested more than US$2 billion (RM6.82 billion) in Asia.

Its managed investments include development and re-development projects, joint-venture investments and real estate companies.

Macquarie Bank Ltd, a pre-eminent Australian investment bank and fund manager, has a 49 per cent stake in MGPA. The rest is held by MGPA management.

Related Posts