Business Times: Thu, Dec 23
in Kuala Lumpur
CAPITAMALLS Asia (CMA) plans to acquire Queensbay Mall - Penang's largest - for slightly under RM652 million (S$273 million) from Malaysia's CP Group helmed by businessman Tan Chew Piau. The purchase will be undertaken through its subsidiaries and an asset-backed securitisation structure, and amounts to RM658.3 million including acquisition- related costs.
In a statement, CMA said it will acquire 91 per cent of the mall's retail strata area or some 916,181 square feet as well as all of its 2,500-plus car park spaces. It pegged the purchase price at about RM730 per square foot, given the mall's net lettable area (NLA) of 892,361 sq ft.
Chief executive Lim Beng Chee said the purchase of Queensbay Mall would substantially strengthen CMA's market leadership in the northern state and also signals CMA's ongoing commitment to invest in Malaysia's retail sector for the long term, following the listing of CapitaMalls Malaysia Trust (CMMT) in July.
Through its Malaysian Reit (real estate investment trust), CMA also owns Gurney Plaza in Penang, most of Sungei Wang Plaza and The Mines in Kuala Lumpur.
In a filing to the Malaysian stock exchange yesterday, CMMT said CMA offered it the first right to acquire Queensbay Mall pursuant to the right of first refusal granted by CMA in June. But its manager CapitaMalls Malaysia Reit Management, having evaluated the offer, decided to decline the offer 'at this juncture after taking into consideration various relevant strategic factors'.
Located at Bayan Lepas between Penang Bridge and Penang International Airport, the family lifestyle mall sits at the heart of a 30 hectare prime waterfront integrated development which includes a hotel, homes and offices. Anchor tenants in the five-storey mall include Jusco and Golden Screen Cinemas, and occupancy as at end- September was nearly 92 per cent.
Previously the Bayan Bay development, the project came to a halt after the Asian financial crisis hit in 1997-98. It was subsequently revived by CP Group, which commenced work on the project in 2005.
The mall's property yield is about 5 per cent but CMA believes its potential for rental and capital gain is strong, once it is upgraded and its asset plan improved. Gurney Plaza's valuation, for example, has improved to about RM1,201 psf of NLA.
Penang has seen double-digit growth in tourist arrivals in the past year and is expected to attract more investments once a number of infrastructure projects are completed, including the Second Penang Bridge and a new low-cost carrier terminal.
Mr Lim said Queensbay Mall would also form the seed asset for CMA's planned RM1 billion Malaysia retail property fund to potentially provide a pipeline of shopping malls for CMMT to acquire.
When established, the property fund would also grant the right of first refusal to CMMT to acquire such interest in the event that the fund opts to dispose of its interest in the future.