CapitaMalls plans RM3.5b investment
Posted on | May 28, 2010
By BUSINESS TIMES
SINGAPORE’S CapitaMalls Asia Ltd plans to invest some RM3.5 billion in Malaysia over the next two to three years to boost it shopping complexes portfolio.
It will use the money to buy existing malls and build new ones.
Chief financial officer Ng Kok Siong said almost half of the RM3.5 billion will come from internal funds, while the rest will be from bank borrowings.
CapitaMalls now operates three malls in Malaysia — Sungei Wang Plaza in Kuala Lumpur, The Mines in Selangor and Gurney Plaza in Penang.
While Ng did not want to commit to the number of malls the money could buy, he hinted that it would at least double the number of malls it owns and operates in Malaysia within the next five years.
The three existing malls are now valued at RM2 billion. The malls, bought over the past two-and-a-half years, are all profitable.
It earned RM190 million in revenue in the year ended December 31 2009 and S$52.4 million (RM123 million) in Earnings Before Interest and Tax (EBIT). Ng expects EBIT to grow by up to 6 per cent this year.
On its business model in Malaysia, Ng said that it would prefer to both own and operate malls. It doesn’t mind having partners but it wants to operate the assets.
“We won’t say no to hypermarkets …. Sabah and Sarawak (for malls) is also an option,” Ng said during a press briefing yesterday.
However, it is only keen on properties which have between 300,000 sq ft and 400,000 sq ft of nett lettable area and a population catchment of 400,000 within a 20-minute drive. Should the malls also have office space, CapitaMalls’ preference is to buy one where at least 65 per cent of the gross floor area, asset value or rental income is the retail portion.
If retail space is less than 65 per cent, it could always opt to do a joint-venture with CapitaLand Ltd.
When asked if the three assets are ready and sufficient for the setting up of a real estate investment trust (REIT), Ng said: “We are not in a rush to set up a REIT … We must go out at a fair price to us and not short-change our shareholders.”
“We are ready to get married, but not to have a lousy husband,” he said.
CapitaMalls has some S$2 billion to S$3 billion (RM4.7 billion to RM7 billion) in its coffers now for investments in China, India and Malaysia.
- Shopping Mall Investment News in Malaysia
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