TA plans RM1.2bil REIT on SGX


TA Enterprise Bhd will list its real estate investment trust (REIT) in Singapore by year-end with an initial fund size of around RM1.2bil.

Executive chairman Datin Alicia Tiah said the group was currently working on the listing of its REIT on Singapore Exchange Ltd (SGX).

“We have been talking with our merchant banks and relevant parties for the listing exercise. Hopefully we will be able list our REIT by year-end. It is just a matter of timing,” Tiah said in an interview.

She said this would be a very good time to go for a listing with the current bull market. She added that REIT would be a good way for the company to unlock its property value.

“We believe Singapore is the best location for our listing exercise as the Singaporean market provides better valuations. The REITs listed on the SGX are doing very well, and the approval period from the regulators is shorter,” she explained.

Tiah said more properties could be injected into its REIT, but TA Enterprise would begin with three properties.

The REIT would include The Radisson Hotel in Sydney, its commercial building in downtown Vancouver in Canada as well as Menara TA One in Kuala Lumpur.

“We will have a good combination of REIT because we will have a hotel as well as commercial buildings. I think investors will like it,” Tiah said.

She said the cash raised through the REIT would go towards the funding of its ongoing development projects as well as upcoming projects.

TA Enterprise expects to unlock more than RM500mil and would use the money generated to buy more properties in China and Vietnam or enlarge its landbank locally.

On its overseas expansion, Tiah said TA Enterprise was currently conducting feasibility studies for ventures into Vietnam and China.

“Vietnam and China will offer good opportunities. We have been discussing with some potential partners in Vietnam, but it is still at the preliminary stage,” she said.

She added that TA Enterprise would like to tap the stock broking and property market in Vietnam.

TA Enterprise is expected to use Hong Kong, in which it already has a presence, a stepping stone to penetrate the huge Chinese market.

“We will venture into the property market in China for the moment before deciding to tap into the Chinese stockbroking industry.

“We will take it one step at a time. We’d rather be safe than lose any money,” Tiah said.

TA Enterprise plans to introduce new services in Malaysia in the second half of 2007 and is currently waiting for licences from the local authorities.

The stockbroking company will introduce services such as corporate advisory work and issue-structured products such as call warrants and exchange-traded funds, as well as go into venture capital lending.

According to Tiah, the company is currently preparing for the launch of Idaman Bintang, a residential and commercial development.

The project, which has a gross development value of RM1bil, sits on a three-acre freehold site at the intersection of Jalan Imbi and Jalan Bukit Bintang.

“Idaman Bintang will have three towers. We will be selling two towers and keep one to generate recurring income,” she said.

However, she did not specify other details like the built-up areas and timing of the project.

“The project (Idaman Bintang) has attracted a lot of interest even before the plan is approved,” Tiah said, adding that she believed that TA had a competitive advantage.

She said the company was also planning to build another two towers – TA Three (60 storeys) and TA Four (35 storeys) – on the land adjacent to the existing Menara TA One at Jalan P. Ramlee, Kuala Lumpur.

The towers are just across the road from Kuala Lumpur City Centre.

Tiah said the project would consist of about 300 units of 6-star hotel service apartments, offices and retail spaces.

On the company’s financial performance, Tiah said she expected all its business segments to turn in a better performance for the current financial year ending Jan 31, 2008.

“Barring unforeseen circumstances, the company is expected to perform better this year due to the positive sentiment of the stock market as well as the property sector,” she said.

“Although we have not announced our first quarter results, I can assure you that they’ll be very commendable results.”

Tiah added that TA Enterprise would also adopt its first ever dividend policy to pay its shareholders consistent yearly dividends of between 40% and 60% of the group’s net profit.

For the financial year (FY) ended Jan 31, 2007, TA Enterprise posted a net profit of RM133.7mil on revenue of RM354.5mil, compared with RM80.7mil and RM312.8mil respectively in FY06.

To a question, Tiah said it did think about privatising the company when its share price was trading way below its net tangible assets (NTA) level.

“TA Enterprise was trading at 88 sen early of the year and the thought of privatisation came because the trading price then was not attractive,” she said, adding that its share price was still trading below its NTA level.

Tiah said she might consider a privatisation if the share price go below its “intrinsic value”.

TA Enterprise’s share price has gained over 110% from a low of 77.5 sen on Jan 11, closing at RM1.63 last Friday. The counter was the most heavily traded counter that day with 29.3 million shares changing hands.

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