PNB and Plaza Damansara's pricing

KUALA LUMPUR (Dec 7): A report this week by The Edge Malaysia zeroed in on Permodalan Nasional Bhd’s (PNB) sale of commercial properties at Plaza Damansara.

They comprise 137 strata units or about 210,000 sq ft of commercial space. Based on documents sighted by the weekly, PNB had asked for RM169 million for the said units.

The properties are mainly shopoffices in Plaza Damansara 1 (PD1) and Plaza Damansara 2 (PD2).

The report stated that the units have been “snapped up” but it also questioned if PNB could have gotten a better pricing for the properties.

Using data from National Property Information Centre (Napic), the business publication revealed that “some of the units were sold at above the asking price while others of similar size were sold at below the asking price”.

The figures obtained for the report showed that of “the 130 [units], some 54 went for more than the asking price while 76 were disposed of at below the asking price”.

When asked about the pricing of the Plaza Damansara assets, PNB said: “Given that we hold a vast portfolio of properties and have a prominent role in the nation’s property landscape, it is not our practice to disclose details with respect to specific transactions. However, suffice to say that the total price consideration for the properties concerned is well above the valuation.”

According to data taken from Napic, “several full block (ground, mezzanine, and the first, second and third floors) sales were for far less than the asking price”, reported the weekly.

To this fact, PNB said: “Apart from pricing, our consideration includes the certainty of selling the entire 137 strata units in PD1 and six units in PD2. The deal that was entered into provided this certainty.

“As mentioned in the response to the earlier question, PNB achieved a combined sales value for PD1 and PD2 that is higher than the indicated amounts combined, as well as the total valuation.”

PNB was also questioned about the rental of the 137 units, with the report saying that the new tenants have raised rents significantly this year (by 50% to 100%).

The Edge asked if “the new owners were able to raise the rates, why didn’t PNB try to get higher rents?”

PNB said: “The decision to divest both properties was part of a strategic move to ensure alignment with our overall strategy.

“Divesting these assets enabled us to recycle our funds to realise the value of our investment at very strong multiples and invest in other opportunities.”

A tenant of a number units said the rent charged by PNB was “ridiculously low”.

“The rent was about RM4,000 to RM5,000 a month for a ground floor unit,” he added.

Meanwhile, it was also reported by the weekly that “the bulk of the properties in Plaza Damansara was sold to a group of related parties using various companies as well as individually”.

It said the “first interconnected group” is made up of Divine Wonders Sdn Bhd, Safeguards Properties Sdn Bhd, Digital Dollars Sdn Bhd, Bumi Land Sdn Bhd and Thevandran K Ragavan.

“Collectively, they bought around RM78 million worth of properties from PNB.”

The second group is Urusprima Sdn Bhd, Astral Corp Sdn Bhd, Gedung Mekar Sdn Bhd, who “collectively bought RM14 million worth of properties from PNB”.

Other buyers include Sycamore Holdings Sdn Bhd, Nuswarna Development Sdn Bhd and Megmoni Sdn Bhd.

PNB said more than half of the transactions are already completed while the rest are waiting for approvals from the “relevant authorities”.