Report: Menara MIDF sold to Singapore-based group

KUALA LUMPUR (Dec 12): Permodalan Nasional Bhd (PNB) has sold Menara MIDF (pictured)  in Jalan Raja Chulan to Singapore-based JD Hospitality Sdn Bhd, The Edge Malaysia reported in its latest issue.

The weekly said that sources told it that the deal “was done at RM140 million or RM875 psf” and “took more than 18 months to complete from the time the building was first put up for sale”.

The only tenant in the 21-storey building currently is PNB wholly-owned subsidiary Malaysian Industrial Development Finance Bhd which will later relocate to PNB 118.

The weekly revealed that the Menara MIDF deal was brokered by Zerin Properties “but CEO Previndran Singhe declined to comment when contacted”.

PNB “confirms” with the publication “that it is in the midst of a sale process but that it is unable to disclose any details on pricing before completing the deal”.

Records at the Companies Commission of Malaysia show that JD Hospitality is 70%-owned by Singapore-based MES Group Holdings Pte Ltd and 30% by Abdul Rawoof Shah VM Kader.

MES manages “a portfolio of real estate investment, including workforce accommodation, integrated logistics and warehouse facilities and services, heritage hotels, office space and student accommodation”, said The Edge.

Menara MIDF has a gross floor area of 190,000 sq ft and net lettable area (NLA) of 160,000 sq ft.

“For PNB, it is a very good deal. I would think that the value would be closer to RM127 million or RM670 psf. It is a very old building. I doubt that it will be worth redeveloping the site.

“The better option would be to refurbish, renovate or repurpose it into a hotel,” says Stanley Toh, executive director of LaurelCap Sdn Bhd.

Two separate sources “indicated” to the weekly its report that “the new owner’s plan is to convert the building into a hotel once MIDF’s lease expires”.

But there is also another option, such as redeveloping the site.

“Menara MIDF is a very old building. I believe the building is already due for redevelopment as its economic life may be at the tail end and the current use may also not be the best use. Based on its land area of 36,382 sq ft, the value psf on redevelopment is RM3,848 psf, which is fairly good.

“Newer properties in the area are selling by strata at between RM1,000 and RM3,000 psf. With MIDF moving out to PNB 118 soon, the building will need to either find a new tenant or go for redevelopment,” said ExaStrata Solutions Sdn Bhd CEO and chief real estate consultant Adzman Shah Mohd Ariffin.

Read the full report in this week’s The Edge Malaysia

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