CapitaLand to enlarge Malaysia footprint

By ANGIE NG

CAPITALAND Ltd, which sees good growth potential in Malaysia's property market, is keen to expand its presence in the country by going into more exciting and challenging projects that will spice up the local property landscape.

The Singapore-based property group has the capability to add value to property projects through its Midas touch and strong branding.

CapitaLand has expanded to over 20 countries including China, India, Australia, Vietnam, Thailand and Japan to reduce its dependence on the city-state of 4.7 million.

According to a senior executive, Malaysia is one of CapitaLand’s key markets in South East Asia and the group is committed to being a long-term real estate player in the country.

“What we have achieved in Singapore so far are exportable and we are doing that in China, Vietnam and Thailand. We have big plans for Malaysia as well,” he told StarBiz in Kuala Lumpur.

In Malaysia, the company has executed its real estate value chain and is one of the largest foreign investors in the real estate market.

Through its US$30.5mil real estate private equity fund, Mezzo Capital Fund, CapitaLand has invested in five high-end residential projects. These are Zehn Bukit Pantai in Bangsar; Seni Mont’ Kiara; Kiaraville and Tiffani by i-Zen in Mont Kiara; and Hampshire Residences, located within the Kuala Lumpur City Centre area.

“These investments are in line with our premier, award-winning homes across the Asia-Pacific,” he said.

Last March, CapitaLand, together with Maybank Group, successfully closed the US$270mil Malaysia Commercial Development Fund (MCDF).

MCDF, one of Malaysia’s largest property funds with an expected gross development value of US$1bil, is looking to invest in real estate development projects in Kuala Lumpur and the Klang Valley.

In the commercial property sector, the company has a 30% stake in Menara Citibank, a prime 50-storey freehold office building located in Kuala Lumpur’s Golden Triangle.

In service residences, CapitaLand's The Ascott Group owns and manages seven properties in Malaysia with a total of 814 units.

The company is also eyeing a bigger stake in Malaysia's real estate investment trust (REIT) market.

Its plans to list a REIT with RM2bil (US$613mil) of assets will see the country’s first foreign-sponsored REIT on Bursa Malaysia later this year.

The company will group its shopping mall assets in Malaysia for the trust.

CapitaLand has been eyeing a presence in Malaysia’s retail market for a while now and started building its asset portfolio last year.

The company had last August paid RM770mil to buy Gurney Plaza in Penang and RM435mil for the Mines Shopping Fair in Seri Kembangan, Selangor. Its latest acquisition was a 61.9% stake in Sungei Wang Plaza for RM595mil in June.

Enhancement works are ongoing to spruce up the facilities and add new space to the shopping malls.

In 2007, CapitaLand and Malaysia’s Quill Group listed Quill Capita Trust (QCT) on the main board of Bursa Malaysia. The trust is managed by Quill Capita Management Sdn Bhd.

Quill Capita Management is 40% owned by CapitaLand Financial Ltd through wholly owned unit CapitaLand RECM Pte Ltd, while Quill Resources Holding Sdn Bhd and Coast Capital Sdn Bhd each has a 30% stake.

Quill Capita Management chief executive officer Chan Say Yeong said: “The Malaysian real estate market is undergoing a stage of rapid growth following healthy economic performance over the past few years.

“Riding on this positive backdrop, CapitaLand has continued to expand and strengthen its footprint in Malaysia through QCT, which owns nine properties in Cyberjaya and Klang Valley, and the US$270mil MCDF.

“We believe Malaysia will enjoy sustainable long term growth and we see real estate value increasing over the years,” Chan added.

QCT’s initial asset portfolio of four quality commercial properties valued at RM280mil has since grown to nine assets in Cyberjaya and the Klang Valley worth RM680mil.

The trust has potential access to a pipeline of completed properties to be developed by CapitaLand’s MCDF and Quill Group.

To further diversify its geographical presence, it recently acquired the freehold RM132mil Tesco building in Jelutong, Penang, which carries a 24-year remaining lease with Tesco.

CapitaLand also has four listed trusts – CapitaMall Trust, CapitaCommercial Trust, CapitaRetail China Trust and Ascott Residences Trust – on the Singapore Exchange.