MRCB to inject Menara Shell into MQREIT for RM640m

In a filing with Bursa Malaysia yesterday, MRCB said its wholly owned subsidiary 348 Sentral Sdn Bhd had entered into a heads of agreement (HoA) with Maybank Trustees Bhd, the trustee for MQREIT, for the disposal of the office tower that is located next to Kuala Lumpur Sentral (KL Sentral) in Jalan Tun Sambanthan here.

The property comes together with a five-storey podium and a four-storey basement car park.

MRCB said the RM640 million price tag for the proposed disposal is based on a valuation by independent valuer C H Williams Talhar & Wong Sdn Bhd. The purchase is expected to be funded by MQREIT via a combination of cash and issuance of new units.

The proposed disposal is subject to a definitive sale and purchase agreement to be entered into between Maybank Trustees and 348 Sentral within 30 business days from the date of the HoA, with an automatic extension of a further 30 business days if MQREIT is unable to complete its due diligence investigation.

In a statement, MRCB said Menara Shell had a total net lettable area of 556,468 sq ft. It commenced operations in May 2013, and has achieved almost 100% occupancy with tenants like Shell People Services Asia Sdn Bhd,AmGeneral Insurance Bhd and Tradewinds Corp Bhd.

MQREIT’s manager MRCB Quill Management Sdn Bhd chief executive officer Yong Su-Lin said the acquisition demonstrated MRCB’s commitment as one of the REIT’s sponsors to provide it with opportunities to access pipelines of completed commercial office properties.

“By leveraging the strong backing of its sponsors, the fund (MQREIT) has within eight months from the completion of the acquisition of Platinum Sentral [to] commence another acquisition exercise that will see MQREIT add into its portfolio an additional quality commercial property in KL Sentral,” she said.

“Hence, subject to the satisfactory due diligence exercise to be completed, we believe that the proposed acquisition will fit well with MQREIT’s investment objective, and provide a good opportunity to grow MQREIT’s portfolio and expand its foothold in KL Sentral,” she added.

MRCB fell one sen or 0.79% to RM1.26 yesterday, valuing it at RM2.27 billion. MQREIT gained one sen or 0.93% at market close, giving it a market capitalisation of RM714.3 million.

This article first appeared in The Edge Financial Daily, on December 4, 2015. Tap here to subscribe for your personal copy.