YTL buys stake in Macquarie Prime Reit

 

$285m deal gives Malaysian group access to 2 Orchard Road properties

MALAYSIAN tycoon Francis Yeoh has just completed a $285 million acquisition that will give his firm a listed presence here as well as access to two prime Orchard Road properties.

The deal, which the managing director described as being made at the ‘right price’, involves buying a stake in Macquarie Prime Reit (MP Reit).

YTL Corporation will acquire from Macquarie Bank a 26 per cent stake in MP Reit and a 50 per cent stake in the holding company for the Reit’s manager and the Reit’s property manager. It will pay cash for 247.1 million units of MP Reit at 82 cents each. This is a huge discount of 49 per cent to the Reit’s net asset value per unit and reflects new valuations in light of the financial crisis.

This gives YTL – one of the Malaysia’s largest listed companies – an attractive 2009 yield of about 9.4 per cent.

The price represents a premium of 17 per cent over the Reit’s 30-day volume weighted average price and 52 per cent over its last traded price.

‘This historic transaction is the largest Singapore Reit merger and acquisition (M&A) deal to date and provides YTL Corp with a key vehicle for its regional and global growth ambitions in the Reit space,’ said Mr Keith Magnus yesterday. Mr Magnus is managing director and head of the Singapore and Malaysia investment banking unit at Merrill Lynch, YTL’s financial adviser. ‘It is also a strong endorsement of the intrinsic value of Singapore’s real estate sector.’

Dr Yeoh said he chose MP Reit as it has two prime properties here and is in a business he knows well, while Singapore is a very attractive investment ground. ‘We think, no matter what, Singapore will pull through this, out of this little turbulence. Like the last Asian crisis, Singapore was the first to pull through.’

YTL, worth US$9 billion (S$13.6 billion), has six listed companies under its umbrella, including Starhill Reit, which has four retail properties in the prime Jalan Bukit Bintang area in Kuala Lumpur.

MP Reit owns over $2.2 billion worth of prime retail and office space in Singapore, Japan and China, including a 74.23 per cent share of the strata lots in Wisma Atria and 27.23 per cent of the strata lots in Ngee Ann City.

Once the YTL deal is completed, MP Reit will be rebranded as Starhill Global Reit and Dr Yeoh will become executive chairman of its manager.

YTL took over KL’s Starhill Gallery and Lot 10 Shopping Centre in 1999 when times were bad and there were hardly any tenants, said Dr Yeoh. But the firm turned things around and put the properties into Starhill Reit, Malaysia’s largest real estate investment trust.

YTL’s plans could include further purchases of MP Reit shares and a merging of the two Starhill Reits.

In Singapore, YTL owns majority stakes in two Sentosa Cove projects – the 18 posh villas on Sandy Island and the yet-to-be launched villas called the Lakefront collection.

Last November, the group made history here by paying $2,525 per sq ft per plot ratio for Westwood Apartments in Orchard Boulevard, making it the most expensive site to be sold en bloc.

The price was all the more striking given that the $435 million deal came when the frenetic activities in the property market here were starting to slow.

The firm recently launched the Sandy Island project and sold three villas in a tight market. ‘Everybody knows the world is very tough but that doesn’t give you an excuse not to try,’ said Dr Yeoh.

YTL’s acquisition arose after MP Reit’s strategic review in mid-February and more than 10 parties had expressed interest. But there was no firm offer to acquire all of the Reit’s units or its investments due to the challenging market environment, MP Reit’s manager said.

Still, Mr Magnus said the YTL deal would kickstart the M&A pipeline for the region, as well as shape the regional Reit sector, as challenging equity and debt conditions due to the global credit crunch have led to attractive valuations.

The tycoon and his company

MALAYSIAN tycoon Francis Yeoh is managing director of YTL Corporation, one of the Malaysia’s largest listed companies.

YTL, worth US$9 billion (S$13.6 billion), has six listed companies under its umbrella, including Starhill Reit, which has four retail properties in the prime Jalan Bukit Bintang area in Kuala Lumpur.

In Singapore, YTL owns majority stakes in two Sentosa Cove projects – the 18 posh villas on Sandy Island and the yet-to-be launched villas called the Lakefront collection.

Last November, the group paid $2,525 per sq ft per plot ratio for Westwood Apartments in Orchard Boulevard, making it the most expensive site here to be sold en bloc.

Source : Straits Times – 29 Oct 2008

YTL’s Sentosa villas to start from $12m each

Sandy Island villas are being designed by Italian architect Claudio Silvestrin

MALAYSIA’S YTL Corp will launch later this year 18 luxury waterfront villas at Sandy Island on Sentosa Cove and prices are expected to start from $12 million for a villa or at least $2,000 per square foot (psf) of land area, BT understands.

YTL’s spokeswoman declined to comment on the planned pricing, but confirmed that the plan is to launch the project later this year.

The development will nestle within a tropical rainforest and boast upscale finishes and fixtures. It is being designed by renowned Italian architect Claudio Silvestrin, famous for designing Giorgio Armani boutiques worldwide as well as the Museum of Contemporary Art in Turin.

YTL has also appointed celebrated Australian landscape architect Jamie Durie for Sandy Island.

Each two-storey waterfront villa will have a basement and a terrace floor, and feature a double-volume living room facing a private berth. ‘Each home will have a private car lift, a passenger lift, kitchen and wardrobes personally selected by Mr Silvestrin,’ YTL’s spokeswoman said.

The villas will be built on 99-year leasehold land plots ranging from about 6,000 sq ft to 10,000 sq ft each and will have four or five bedrooms with en-suite bathrooms, a pool and timber patio set within a waterfront garden designed by Mr Durie. Sandy Island will feature more than 30 trees transplanted from the Resorts World integrated resort site.

Sandy Island is located in Sentosa Cove’s Southern Precinct. YTL also has another villa development in the waterfront housing district’s Northern Precinct on the Lakefront Collection site abutting Serapong Lake. This project is expected to comprise more than 10 villas which will boast views of Serapong Golf Course. The project is still in the design development stage and could be released next year.

On the mainland, YTL is looking at different proposals by world-renowned architects to develop an ‘iconic lifestyle quality development’ on the Westwood Apartments site at Orchard Boulevard.

YTL inked a deal in November last year to buy the 62,179-sq-ft freehold property for $435 million, which worked out to $2,525 psf of potential gross floor area inclusive of an estimated $4.6 million development charge at the time. Westwood Apartments’ collective sale was approved by the Strata Titles Board earlier this week. The deal was brokered by Savills Singapore. Law group Rodyk & Davidson acted for the majority owners.

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Source : Business Times – 26 Jun 2008