Sunway City to place properties under REIT

Thursday, April 8, 2010


Sunway City to place properties under REIT


KUALA LUMPUR: Sunway City Bhd (SunCity) and its subsidiaries are proposing to dispose their entire interest in selected properties to a real estate investment trust (REIT) to be set up by SunCity and listed on Bursa Malaysia.

The purchase consideration, which will be determined later, will be satisfied by way of cash or units in Sunway REIT or a combination of both, the company told Bursa Malaysia yesterday.

SunCity said the proposed properties would include the Sunway Pyramid Shopping Mall, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Menara Sunway, Sunway Carnival Mall, Sunway Hotel Seberang Jaya, Suncity Ipoh Hypermarket and Sunway Tower.

The company is also disposing three parcels of leasehold land measuring 19,406 sq metres in Selangor to its subsidiary Sunway Pyramid Sdn Bhd (SPSB) for a consideration to be determined later.

SunCity owns a 52% stake of SPSB while the other 48% stake is held by Reco Pyramid (M) Sdn Bhd.

SunCity has also proposed to acquire 48 million shares or 48% of SPSB from Reco Pyramid (M) Sdn Bhd (RPSB) and 9.6 million shares or 48% stake in Sunway Resort Hotel Sdn Bhd from Reco Resort Hotel (M) Sdn Bhd.

SunCity said the investment objectives of the Sunway REIT were to provide the unitholders with an exposure to a diversified portfolio of authorised investments that would provide stable cash distributions with the potential for sustainable growth of the net asset value per unit.

“Subject to the approvals of the relevant authorities, Sunway REIT proposes to undertake a public issue of units in Sunway REIT and subsequent listing of and quotation for its entire issued and paid-up units on the Main Market of Bursa Malaysia,” it said.

SunCity said the proposed disposal of the land and properties would allow the group to realise its investments in the properties.

The proceeds from the proposed disposal of the land and the properties would be used to acquire land bank, working capital, future business expansion and to repay the group’s borrowings, it said.

SunCity added that the disposal of the land and properties would also enable the group to enhance the development of the real estate investment market in Malaysia through its proposed holdings in the units in Sunway REIT as well as its involvement in the management of Sunway REIT upon the completion of the proposed listing.

SunCity said subject to the approvals of relevant authorities,

Sunway REIT has proposed to undertake a public issue of units in Sunway REIT on the Main Market of Bursa Malaysia.

By The Star