Sunway City Bhd (SunCity) has proposed to acquire Wisma Denmark and several parcels of adjoining vacant lands at Jalan Ampang, Kuala Lumpur, for RM170 million. The proposed acquisition was for investment and development purposes, the company said on March 21.
Wisma Denmark houses The Danish Royal Embassy and Kuala Lumpur civil courts, was back on the market after a deal to sell the property to a Singaporean insurer was rejected by the Government in February. It comprises 27 levels of office space, 6 levels of elevated car parks and 2 levels of basement car parks.
It said a detailed announcement will be made to Bursa Malaysia upon the signing of the formal agreement.
SunCity’s newly-acquired Wisma Denmark will form part of a huge pipeline of assets for the group’s planned RM3 billion real estate investment trust (REIT), group chairman Tan Sri Jeffrey Cheah says.
SunCity will float the trust by as early as the end of this year, after some delay, as it wants to first complete building a shopping mall in Penang and extending the Sunway Pyramid mall. The two buildings are part of the initial assets for the trust.
“We want these buildings to be completed and fully-tenanted before we float the REIT,” Cheah told reporters on the sidelines of Invest Malaysia conference in Kuala Lumpur yesterday.
He plans to hold about 30 to 35 per cent of the REIT after listing, just enough to control the assets.
The mall in Penang is expected to open in June this year and is now over 80 per cent tenanted.
The extension work on Sunway Pyramid will finish by September and over 80 per cent of the retail space has been taken up.
“Listing of the REIT will be anytime after that. We are very confident there are long queues for the retail space. We just want to ensure the right tenant mix,” he said.
The buying of Wisma Denmark will ultimately be put into the trust too, he said
Apart from that, Cheah said, other potential assets for the REIT include the four office towers in Sunway that the group is building now, the KL South shopping mall and office, Sunway Medical and Monash University hostels.
“This is the growth story of our REIT. The reason why Malaysian property trusts are not performing now is mainly because investors think the owners are cashing out.
“We don’t want that and have lined up good assets for future injection, to keep growing the REIT,” Cheah said. “With a very good name and good assets, we are a winner,” he added.
