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buy apple developer account:So what if Singapore firms snap up properties in KL

admin2021-01-2421

So what really is the fuss when government-linked companies (GLCs) sell their assets in the Golden Triangle to foreigners, especially from Singapore? MANY of the buildings and hotels located in the Golden Triangle are already owned by foreigners. Just take a walk along Jalan Sultan Ismail at the Golden Triangle and one cannot help but notice that most of the buildings and hotels are foreign owned. The Renaissance Hotel is owned by a conglomerate from Bangladesh while Concorde Hotel is owned by a Singaporean. Next to Concorde is the IMC building that is owned by a Hong Kong group and further down the road, a Singapore group owns the KFC building. Except for the KFC headquarters that used to be owned by the Employees Provident Fund (EPF), the rest of the buildings used to be owned by local companies or individuals before they sold it to foreigners over the years. So what really is the fuss when government-linked companies (GLCs) sell their assets in the Golden Triangle to foreigners, especially from Singapore? When the country should be welcoming long-term foreign investors with deep pockets into the sluggish property sector, what we have is some politicians making a fuss over the sale of assets owned by GLCs in the Golden Triangle. What is so special about GLCs that they are not allowed to sell assets? Are they not allowed to behave like commercial entities? There really is nothing sentimental or sacred about hotels and office blocks located in the Golden Triangle. Property values will only rise over time and owners – including GLCs – should cash out when they are happy with the price or in need of money. Boustead Holdings Bhd is asset heavy, has debts and lacks cash flow. Selling Royale Chulan Hotel is only the logical thing to do, even if it is at a reduced price, to lighten its balance sheet. A Singapore firm is buying the hotel for RM177mil, lower compared to the RM197mil price tag when the deal was first mooted in March 2019. The price per room for the 418-room hotel works out to about RM423,000 per room. A few years ago, Boustead would have fetched a better price when the hotel sector was thriving. Under the current environment, hotels are going at discounts of up to 30% or even more. A leading consultant says that owners of hotels are prepared to dispose of their assets at steep discounts because of stiff competition and uncertainty as to when business will be back to normal. One of the reasons why Boustead is selling the hotel is because of its below average occupancy rate compared to the other hotels in Kuala Lumpur. Boustead, in justifying the sale in 2019, stated that the hotel’s occupancy was 52% when the average in the Klang Valley was 74%. The lower occupancy was due to the stiff competition and the location of the hotel, which is not exactly at the Golden Triangle. Many known hotels are already owned by foreigners. Among the hotels are the Pullman, Inter Continental, Westin, Double Tree Hilton and the Renaissance. A leading property consultant figured that 40% of the leading hotels in Klang Valley are owned by foreigners. As for PNB selling the MIDF building, it is only to be expected considering that Merdeka 118 is likely to come into the market by the middle of next year. When the second tallest tower in the world is ready, all companies under PNB will move into Merdeka 118. At that time, the Klang Valley will have so much empty office space that rentals and prices of buildings will drop. So it is wiser for PNB to sell some of its existing buildings rather than keep it and wait for tenancy at reduced rates. The price that PNB sold the MIDF building at about RM850 per square feet (psf) is reasonable, considering the current environment. The KFC building was sold at less than the price of RM850 psf in 2019. What’s worse is some property owners want to dispose of buildings before the Merdeka 118 is up but there are no buyers at sight. Former Prime Minister Datuk Seri Najib Tun Razak has criticised the sale of assets by GLCs. But during his tenure as Prime Minister, he also saw many foreign investors coming into Malaysia and scooping up assets. Developers from China even built islands and he did not oppose it. The black mark during Najib’s tenure is the sale of prime government land to the scandal-plagued 1Malaysia Development Bhd (1MDB) at stiff discounts to the market price. 1MDB took on heavy debts on the account that it could be settled by proceeds from the development of the land. 1MDB sold parcels of land to big names to develop TRX. But eventually it had to rope in the assistance of the Ministry of Finance to complete the iconic Exchange 106 tower that was built by a foreign controlled developer.. The recent transactions involving GLCs seem to be commercially driven. There are no reports of hidden hands or the GLCs being forced to sell the buildings. So why politicise the transactions? If there are elements of wrong-doing, it should be reported or highlighted. Singaporean firms buying buildings and hotels are certainly not wrong. The key for property-related deals at the moment is the quality of investors, the source of funds and whether they have deep pockets to sustain the long period of oversupply in office space and hotels in the coming years. Office blocks and hotels are fixed assets that cannot be taken away from Malaysian soil. So, really there is no reason to politicise property transactions just because it involves foreigners. M. Shanmugam is a former specialist editor of The Star. Views expressed here are his own.
转载说明:本文转载自Sunbet。,

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