BB Plaza to make way for MRT station

Wednesday, June 27, 2012

Landmark: The iconic 38-year-old BB Plaza, located in the heart of Kuala Lumpur, will be demolished to make way for the MRT project.

KUALA LUMPUR: The 38-year-old Bukit Bintang Plaza (BB Plaza) will need to make way for the construction of a My Rapid Transit (MRT) station, contradicting earlier reports that only the front of the property and basement will be needed for development purposes.

UDA Holdings Bhd officials, who earlier met with BB Plaza’s tenants to clear up the confusion on the status of the property, said they had been asked to vacate the premises by MRT Corp by the end of the year in a meeting two weeks ago.

UDA, a wholly-owned entity under the ministry, owns BB Plaza as well as several other commercial properties in central Kuala Lumpur, Ipoh and Johor Baru.

UDA group managing director Ahmad Abu Bakar said at a media briefing that Tradewinds Corp Bhd, a property and hotel conglomerate majority-owned by media-shy tycoon Tan Sri Syed Mokhtar Al-Bukhary, had expressed its interest to acquire the property.

“We discussed it at the board and have related the offer back to the ministry, so we’ll wait for the decision,” he said, adding that there were parties who were interested to either jointly develop or acquire the property.

According to recent reports, Tradewinds Corp had approached UDA to redevelop BB Plaza under a 50:50 joint venture which the latter’s board had declined because the returns were not lucrative enough.

MRT Corp, the body tasked with overseeing the development of the MRT line, have previously said it has no plans to acquire BB Plaza, valued at an estimated RM500mil.

Ahmad said UDA had no plans to redevelop the property on its own due to the lack of funds. “There’s been talk of redevelopment but not in the near term as we don’t have the funds because we’re trying to clean up our balance sheet,” he clarified.

UDA’s senior vice-president of property management Syed Ahmad Nazri Syed Kamaruzaman said the company was just as surprised as the tenants that the property was going to be demolished.

“We had a meeting with the tenants because of the confusion over the status of the property especially after reports came out saying that BB Plaza will not be demolished. In all our meetings with the ministry, the understanding is that the property will be demolished,” he said.

Syed Ahmad Nazri said a letter from MRT Corp only requested UDA to vacate the front of the property while Ahmad pointed out that this has caused a lot of confusion.

“Initially MRT Corp told us that they just need the front portion and that the station will be underground.

“They said there was no need to demolish the whole building. Later on when we discussed with them, they said the whole building will have to be brought down, so this is the confusion of the last one month or so,” he said.

Meanwhile, Syed Ahmad Nazri said compensation for the tenants was discussed but it was the stance of the company that compensation should come from MRT Corp.

“In fact we’ve passed the claims of several of the tenants to MRT Corp and they have come back to us asking for more information. Even though there’s nothing formal, we’re working towards it,” he said.

By The Star

Growing supply of office space in Klang Valley

Saturday, January 23, 2010

PEPS president James Wong (inset) says there’s a large amount of new office space being developed around the fringe of Kuala Lumpur including Petaling Jaya, Damansara, Puchong and Mont’ Kiara.

KUALA Lumpur’s office market is in for a tough year in 2010 with the expected completion of another 4 million sq ft of new office space which may further dampen rental and occupancy rates.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) president James Wong says there is also a large amount of new office space being developed around the fringe of Kuala Lumpur including Petaling Jaya, Damansara, Puchong, and Mont’ Kiara.

This is in addition to the 4 million sq ft completed last year of which a number of the buildings are still unoccupied although there are tenants that may be moving in later this year.

“With such a large amount of new office space, demand will not be able to keep up with the growing supply and this will result in more unoccupied space. Overall occupancy and rental rates are expected to face downward pressure this year,” Wong tells StarBizWeek.

He says while offices that are well-planned, managed and marketed will achieve high occupancy, there will be those that will be left vacant.

“Office occupancy and take-up in the city used to be around 2 million sq ft when the market was at its peak around late 2007 but it has since dropped to just over a million sq ft now,” Wong adds. The overall office occupancy rate is expected to decline further to about 80% this year from around 87% in the last quarter of 2009.

According to Wong, office demand is driven by the performance of the economy which in turn is a function of business investments.

“In Malaysia, a large part of this is foreign direct investments (FDIs). Hence, the key is to attract FDIs and to draw up incentives to change the economic model of the country to being knowledge-based and driven by high-technology.”

Hopefully, the Government’s aim of achieving a high income economic model will provide an impetus for higher take-up of office space, he says.

“The market’s revival will also depend on the implementation of the two stimulus packages and their spin offs to the economy,” Wong adds.

DTZ Nawawi Tie Leung executive director Brian Koh points out that the global economy will continue to be filled with uncertainties this year and inflow of FDIs are not expected to pick up in the near future.

“Within the next three to four years, there will be 14.4 million sq ft of purpose-built office space scheduled to be completed. Unless there is a surge in demand, the additional supply will cast a dampening impact on rental and occupancy rates in the next few years,” he says.

Koh agrees that a possible upside for the market will be the new economic model which will hopefully lift economic growth, especially in the services sector.

Re-Group Associates executive chairman Christopher Boyd says with office space vacancies hovering around 13%, it is still very much a tenant’s market.

“Tenants are spoilt for choice and rental rates have come off by around 20% to 25% so far, with grade A office space fetching between RM5 and RM6.50 per sq ft, while grade B from RM4 to RM5.50 per sq ft,” he says.

Boyd says despite the higher supply, Malaysia’s office market is not likely to crash.

“In fact, the low rental rates here are a boon for businesses. Being consistently inexpensive is a good thing for the business people as it makes it easier for them to plan ahead and make decisions,” he notes.

Zerin Properties chief executive officer Previndran Singhe concurs with Boyd, saying the rental correction in the office market is not alarming and “is just a normal market cycle.”

“The concern that the over supply will adversely impact the office market will only be short term and things should recover, especially with the ongoing liberalisation of the various business and financial services sectors.”

Demand for office space should pick up among oil and gas companies and financial services providers, he says, adding that building owners need to be more innovative to attract the right tenants. “In fact, landlords have become more realistic in how much rent they can ask for and rental rates will find their new equilibrium in time to come,” he says.

ECM Libra analyst Bernard Ching notes that there has been a pick up in the office property sub-segment with more local investors looking for quality assets.

In the last quarter of 2009, the investment market jumped by about 58% to RM1.39bil against the previous quarter. The purchasers comprised mainly real estate investment trusts, the Employees’ Provident Fund and government-linked companies.

Some of the notable deals concluded recently include a 50% equity interest in Menara Citibank by Hap Seng Consolidated Bhd, the acquisition of Tower D, Glomac Damansara by Lembaga Tabung Haji as well as the acquisition of a retail/office tower in Southgate by Permodalan Koperasi Felda.

Ching notes that the office market is expected to see more foreign participation in the coming months as the global economic recovery gathers momentum.

“This follows a series of well received economic initiatives to liberalise the economy to attract foreign participation, including the repeal of the Foreign Investment Committee which regulates mergers and acquisitions in the country,” Ching says.

By The Star (by Angie Ng)

Menara Hap Seng - a touch of modern simplicity

The Japanese garden located on the roof of Menara Hap Seng.

Set within the highly desirable and internationally acclaimed Golden Triangle of Kuala Lumpur, Menara Hap Seng is flanked by the majestic KLCC Twin Towers, the eminent KL Tower and the bustling presence of Bukit Bintang. This strategically located building (formerly known as MUI Plaza) was acquired in 2004 and is currently the Hap Seng Group’s corporate headquarters.

The building, which is on Jalan P. Ramlee, is a known landmark in the past and remains iconic till today. Having undergone a major facelift, Menara Hap Seng’s stunning facade and modern interior houses 21 levels of corporate suites.

In addition, there is also The Podium, which has a forecourt with water features, beautiful landscaping and three levels of alfresco dining, restaurants, retail outlets, banks and much more.

The building also boasts a seminar hall, meeting rooms and an auditorium. The Auditorium and Convention Centre in Menara Hap Seng is an addition to the Podium at Menara Hap Seng and seeks to provide a cost effective and flexible alternative to managing seminars and functions. There are two seminar rooms and one auditorium. The Auditorium has a capacity of 350 people while the seminar rooms have flexible arrangements of up to a maximum of 110 and 60 pax respectively.

This year Menara Hap Seng has been awarded the Malaysia Property Award 2009 in the “Office Development Category”.


Hap Seng Land chief executive (property division) Datuk Paul Ng Kee Seng.

“We are really happy and delighted with the win this year. This building has remained an icon on Jalan P. Ramlee and it will always be remembered fondly by the people in the Klang Valley and beyond,” said Hap Seng Land Sdn Bhd’s Chief Executive (Property Division) Datuk Paul Ng Kee Seng.

He further elaborated on the project. “This award has also set a new milestone for the Hap Seng brand. We are a wellestablished brand in the property industry. However, this recognition has brought the brand to greater heights given that we have proven our abilities in refurbishing an old building and giving it a new look and feel.”

Looking at Menara Hap Seng one would recognise the open and bright atmosphere of the building. Surrounded by various shops and dining outlets, its’ simplicity is distinctly unique.

“Menara Hap Seng stands out among the rest because it is able to bring a new vibrant and refreshing ambience into an office space. Its open concept and lifestyle attributes are reflective of our philosophy that office space need not be boring.”

Ng also added, “Menara Hap Seng is a reflection that Malaysians are capable of being innovative and creative when it comes to refurbishing or developing office spaces.”

Going green
In the past few years, the environment has been given much attention, including property development. Menara Hap Seng echoes the green theme by using nature as part of its design in making the office space a better environment to work in. The building has a skylight, which delivers large amounts of sunlight into the Podium. In the morning, the place is lit up with natural sunlight, which effectively saves electricity. The paint used is also environmental friendly.

Ng also said, “The building was old in its design. We took a simplistic or minimalistic concept that can be seen around in nature and emulate it to give Menara Hap Seng a cool and yet vibrant look.”

Ng continued by saying “The design for the office space needs to be highly functional yet appealing to our tenants. As such, it is a positive sign that all our available office space has been taken up, and on top of that, we receive constant request for our office space.”

Best Office Development
An office space must have an aura of comfort and satisfaction for the working person and this is aptly demonstrated at Menara Hap Seng. Ng said, “Menara Hap Seng has everything in one place, from eateries, clothing stores right up to a golf shop; everything is in place making it convenient for tenants,”

Menara Hap Seng has a wonderful concept of having the Podium with all the surrounding outlets in it. It was this concept that was one of the reasons for giving Menara Hap Seng a facelift.

When envisioning the office space, the beauty and practicality was also the main theme in making it unique. “We want to have beauty in simplicity!” said Ng. Many people who come into our building are not our tenants but those in search of food, entertainment, banking or even some retail therapy. The energy and ‘chi’ this building brings is absolutely amazing,” said Ng.

Menara Hap Seng is a unique building with its own characteristics.

The simple and beautiful make of this office space makes the building a benchmark among other office spaces around KL.

Ng continued, “My dream is that Menara Hap Seng starts off Jalan P. Ramlee into a walkway of fun and fiesta. It would be gratifying if the stretch from Menara Hap Seng all the way to Bukit Bintang be called the ‘P. Ramlee Walk’. This building is as iconic as Malaysian’s legendary artist P. Ramlee.”

With dreams and aspirations such as that, no wonder Menara Hap Seng has been made winner in the “Office Development Category.”

An iconic building contributing to the energy in KL, only more can be expected from this dynamic building and its’ plentiful offerings.

By The Star (by Prakash Daniel - Malaysia Property Award 2009 - Best Office Development)

Hap Seng buys half of Menara Citibank, KLCC

Saturday, August 8, 2009

Hap Seng Consolidated Bhd has bought half of Inverfin Sdn Bhd, owner of Menara Citibank in Jalan Ampang, Kuala Lumpur, for about RM310 million. Its subsidiary, Hap Seng Realty Sdn Bhd (HSR) bought all interests in Inverfin owned by CapitalLand Ltd and Amsteel Corp Bhd.

The remaining half of Inverfin is owned by Menara Citi Holding Co Sdn Bhd. A Citibank Malaysia spokesperson said it is not in talks to sell its 50 per cent stake in Inverfin. Late last year it wanted to sell its interest in Inverfin to IOI Corp Bhd but the deal fell through.

The Amsteel stake comprising 2,000,001 shares is presently charged to RHB Investment Bank Bhd. This confirmed a Business Times report on June 30 2009 that Hap Seng was interested to buy half of Menara Citibank.

Inverfin is a special purpose entity and investment company formed for the sole purpose of owning and operating Menara Citibank.

At the end of August 2007, Inverfin issued medium term notes of RM160 million to selected investors where it charged Menara Citibank as security in respect of the notes.

Menara Citibank is built on a parcel of freehold land, measuring 12,694 sq m and has a net lettable area of 68,156 sq m.

Inverfin is the proprietor of Menara Citibank, and shares the use of five levels of basement car parks with the proprietor of an adjacent property known as "Hotel Nikko".

The purchase price of Inverfin is based on 50 per cent of the net asset value of the company as at June 30, after taking into account the agreed property value of Menara Citibank which is fixed at RM607,45 million. It is understood that Hap Seng is paying RM850 per sq ft of lettable area.

The transacted prices of prime office buildings within the Golden Triangle and the Central Business District were in the range of RM800 to RM1,200 per sq ft of lettable area.

The gross rental revenue based on the latest audited accounts of Inverfin for the financial year ended December 31 2008 was approximately RM48.76 million, giving a gross yield of 8.03 per cent.

Inverfin's operating profit was RM38.13 million, giving a net yield of 6.28 per cent. The rental revenue and operating profit are expected to improve with the rent rollover for year 2009 onwards, Hap Seng said in a statement to Bursa yesterday.

Hap Seng said the purchase is consistent with the group's corporate business direction of expanding its property division both for development and investment holding.

Menara Citibank is located in an established commercial precinct and is expected to rise further in popularity.

Hap Seng proposes to borrow from banks up to RM200 million to pay for the purchase, while the balance will be paid by internally generated funds.

With the acquisition, Hap Seng's gearing ratio is expected to increase from 1.06 to 1.14 based on its audited accounts as at December 31 2008.

By Business Times