MRCB to sell Platinum Sentral
Malaysian Resources Corp Bhd (MRCB) is planning to divest itself of the Platinum Sentral buildings in KL Sentral to possibly settle its debt. It has appointed an agent to handle the sale, say sources.
Platinum Sentral, launched in May 2012, comprises five low-rise office blocks, retail space, business centres, hospitality zones and green spaces. A central atrium connects all five enclosed blocks. The entire project, with a gross floor area (GFA) of 980,000 sq ft, sits on 4.93ha of freehold land. Platinum Sentral has some 635 carpark bays. A source tells FocusM
that real estate agency CB Richard Ellis (CBRE) Malaysia has been appointed to handle the sale. CBRE managing director Allan Soo declined to comment when contacted to confirm the sale of Platinum Sentral.
It is understood that the buildings, owned by MRCB’s unit MRCB Sentral Properties Sdn Bhd, could fetch as much RM750 mil. According to MRCB’s 2012 annual report, Platinum Sentral has an overall gross development value (GDV) of RM700 mil and the net book value of Platinum Sentral is RM405.14 mil as of Dec 31, 2012.
Potential buyers for the buildings, named blocks A, B, C, D and E, are believed to be viewing the property.
was informed that the closing date to make an offer has been extended but was unable to determine the date. The office space in all five buildings, totalling some 445,377 sq ft in net lettable area (NLA), is fully tenanted; while the retail lots are believed to be 13% to 15% occupied. The NLA for the retail space is some 68,663 sq ft.
Tenants include SME Corp Malaysia and the Land Public Transport Commission (SPAD). The former has taken 216,980 sq ft of space in Block B and Block C, while the latter is said to occupy 67,286 sq ft in Block D. Block A and Block E are said to have some 91,490 sq ft and 69,621 sq ft of NLA respectively. Other tenants at Platinum Sentral include SBM Malaysia Sdn Bhd, the Iclif Leadership & Governance Centre and the Performance Management & Delivery Unit (Pemandu).
According to a report by Malaysian Rating Corp Bhd (MARC) dated Aug 16, regarding MRCB Sentral Properties’ RM400 mil debt, the average rental for the office space is RM8.70 per sq ft and RM6 per sq ft for the retail space. MARC adds that the majority of the office space is occupied by three tenants which are government-linked companies.
It notes that as final repayment of the debt, MRCB Sentral might opt to refinance or dispose of Platinum Sentral.
A source says that while the entire land measures 4.93ha, about 2.03ha or five acres will be to accommodate public infrastructure including the mass rapid transit (MRT), and for the access roads. “So the real land area is about seven acres [2.84ha],” the source tells
. Nevertheless, an industry observer says that this piece of land has potential for future development as the current plot ratio is low. “The buyer could resubmit in the future for a higher plot ratio.”
Quoting an example of the potential value of the land, he says: “If the land available is about seven acres [2.84ha], this translates to 304,920 sq ft. Recent land transactions in Kuala Lumpur have been between RM2,000 and RM3,000 per sq ft. Even if we took about RM2,500 per sq ft, the land value alone will be in excess of RM750 mil.
“This acquisition has a very good upside as the land value and the property [land and building] are priced at about the same amount,” he points out.
The office buildings have been awarded Singapore’s Building and Construction Authority (BCA)’s Platinum Award (Provisional). It is said to be Malaysia’s first commercial development to be awarded this highest green-building rating.
Platinum Sentral is also said to be Malaysia’s first commercial building that uses Cisco’s Smart+Connected Real Estate (S+CRE) to enhance the tenants’ experiences through better planning, construction and space configuration. It provides a unique state-of-the-art, distinctive smart green building that offers seamless connectivity and a creative working environment.
It provides a digital guidance system that autonomously manages the car parks within the building. MRCB, in its annual report, says that this is in line with its agenda of promoting sustainable development, particularly in energy-efficient and green-design buildings.
Platinum Sentral is not the only asset for sale within KL Sentral. CIMB Mapletree Management Sdn Bhd, which owns the 41-storey Menara CIMB at Kuala Lumpur Sentral, is also looking to sell the building. It is a 600,000 sq ft, Grade A office tower developed for an estimated RM458.5 mil. This building, with a confirmed tenancy of 90%, is inviting expressions of interest.
Components within KL Sentral include Plaza Sentral, Suasana Sentral Condominium and Suasana Sentral Loft. Hotels include Hilton Kuala Lumpur, Le Meridien Kuala Lumpur, Aloft Kuala Lumpur Sentral and St Regis luxury hotel which is slated to open in 2014. Lot 348 will house the new headquarters of Shell Malaysia and will include a 27-storey serviced apartment building, Ascott Sentral.
UEM Group Bhd, the Malaysian Investment Development Authority (Mida) and the Companies Commission of Malaysia (SSM) also have their headquarters within KL Sentral.
Upon completion, the entire KL Sentral project will have a GDV of RM11.2 bil, which includes 9.2 million sq ft of commercial space, 3.26 million sq ft of residential space and 3.78 million sq ft of lifestyle space.
In terms of performance, MRCB’s revenue in the six months ended June 30, 2013 declined by 33.2% to RM447.77 mil from RM670.13 mil; while profit before tax fell by 66.6% to RM18.19 mil from the RM54.45 mil posted a year earlier. The lower revenue and profit were attributed to revenue and the related profit recognition from Kuala Lumpur Sentral’s Lot G office towers and hotel development, sold en bloc in the preceding year’s cumulative quarter.
At the same time, work is ongoing for the development of Lot B (Q Sentral office) and Lot D (The Sentral Residences) which are on strata sales and at the early stage of construction.
In the year ended Dec 31, 2012, MRCB posted RM1.28 bil in revenue and a profit-before-tax of RM134 mil.
Meanwhile, MRCB announced on Sept 2 that Datuk Mohamad Salim Fateh Din has been appointed the group managing director with immediate effect. His appointment follows MRCB’s acquisition of five companies – Puncak Wangi Sdn Bhd, Gapurna Builders Sdn Bhd, Gapurna Land Sdn Bhd, Gelanggang Harapan Construction Sdn Bhd and Gapurna Global Solutions Sdn Bhd – which will see MRCB’s landbank in the Klang Valley increase by 8.51ha. The purchase of the five companies was for RM469 mil in cash and shares. This deal will result in Gapurna emerging with a 12.51% stake in MRCB.
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