Published May 14, 2009

Selangor state property arm eyes Reit buy

It is looking at listed Reit with total assets valued at more than RM600m

	Email this article
	Print article
	Feedback

(KUALA LUMPUR) The Selangor State Development Corp (PKNS) plans to take control of a local real estate investment trust (Reit) within the next six to 12 months to grow its business, according to a report in The StarBiz.

The tabloid said that its state property arm is eyeing a listed Reit with total assets valued at more than RM600 million (S$249.2 million). General manager Othman Omar said that PKNS was negotiating to buy a controlling stake. He declined to name the Reit.

'We hope to seal the deal by the end of this year. We want Reits to be one of our tools to grow,' he said in an interview in Petaling Jaya. PKNS will inject a slew of properties that it owns into the Reit to double the size to over RM1 billion, Mr Othman said.

It is targeting Wisma PKNS, Kompleks PKNS, the 500,000 square foot Shah Alam City Centre mall and the Shah Alam convention centre.

PKNS will include a few shopping malls that it is setting up in its new developments in the Klang Valley as well as the 27-storey Menara Worldwide office tower in Jalan Bukit Bintang, owned by its wholly owned unit, Worldwide Holdings Bhd (WHB).

'We plan to reap the best benefits during this crisis to position ourselves. This is the best time to get skilled workers, cheaper land and assets,' Mr Othman said.

PKNS has put in place key performance indicators for all departments as part of efforts to increase its revenue and net profit.

It aims to achieve a record RM1.06 billion revenue this year.

It also wants to double profit margins to 40 per cent by scrapping negotiated tenders and replacing them with open tenders.

'PKNS has a responsibility for making profits, which can be channelled back to the state. We will look at all avenues to grow, but cautiously,' Mr Othman said.

PKNS, which has 4,000 ha of undeveloped land in the Klang Valley, is looking at tying up with Selangor state units Kumpulan Hartanah Selangor Bhd, Perbadanan Kemajuan Pertanian Selangor and Permodalan Negeri Selangor Bhd to develop their landbank.