Guocoland (Malaysia) Bhd has proposed to dispose of Menara Guoco in Damansara Heights to Tower Real Estate Investment Trust (Tower REIT) for RM242.1 million cash, in a related party transaction.
The property is a 19-storey office building known as Menara Guoco erected on part of that piece of freehold land held under Geran 74955, Lot 58303 in the Mukim and District of Kuala Lumpur, State of Wilayah Persekutuan Kuala Lumpur.
It forms part of an integrated commercial development known as Damansara City, comprising another office building, a hotel, a retail mall, serviced apartments and car parks. The Property is strategically located in Damansara Heights, which is an established neighbourhood with easy accessibility from the Kuala Lumpur City Centre and Petaling Jaya. The Property is easily accessible from a few major highways and roads such as Jalan Tuanku Abdul Halim, SPRINT Highway, Jalan Kuching, Federal Highway, Damansara-Puchong Expressway and Damansara Link. In addition, the Property is also accessible via public transport such as Mass Rapid Transit with stations located at Pusat Bandar Damansara and Jalan Semantan as well as a bus station located across Jalan Johar, giving the Property excellent connectivity to other urban and sub-urban residential, commercial and industrial hubs within Klang Valley. The Property is designed with energy efficient and green features, and is accredited with Green Building Index (GBI) and Gold Leadership in Energy and Environmental Design (LEED) certifications. Damansara City has been awarded with Multimedia Super Corridor (MSC) Malaysia Cybercentre status, with the Property as the Cybercentre’s Designated Premises.
The Purchase Consideration was arrived at on a willing-buyer willing-seller basis after taking into consideration the market value of the Property of RM242.1 million (RM1,045 psf) as appraised by First Pacific Valuers Property Consultants Sdn Bhd, a firm of professional valuers appointed by the Manager, via its valuation report dated 19 February 2020 using the investment and comparison methods of valuation. The Valuer has also been appointed by GLM to appraise the market value of the Property.
The occupancy rate of the Property was approximately 97.1%. After the Proposed Acquisition, Tower REIT’s pro forma occupancy rate for its portfolio is expected to improve from 48.1% as at the LPD to 59.8%. The committed occupancy will enhance income sustainability for Tower REIT’s unitholders over the long term. Based on the tenancy schedule of the Property, the top 3 tenants of the Property collectively accounted for approximately 70.4% of the total net lettable area of the Property.
The Property is situated within a mixed-use development comprising a retail mall, a 5- star hotel, a Grade A office building and serviced apartments, delivering a full suite of amenities in a single location that meets the needs of office tenants beyond their demand for a productive workplace. In addition, a Mass Rapid Transit station and a bus station are within short walking distance from the Property, providing easy accessibility and connectivity for office tenants. All these attributes would raise the profile of the Property, positioning Tower REIT to benefit from robust tenant demand.
Postal address : Menara Guoco, Damansara City, No. 6, Jalan Damanlela, Bukit Damansara, 50490 Kuala Lumpur
Strata title : Not issued yet
Master title : Geran 74955, Lot 58303, Mukim and District of Kuala Lumpur, State of Wilayah Persekutuan Kuala Lumpur Beneficial owner : DC Offices
Category of land use : Building Existing and proposed use : Offices
Tenure : Freehold
Market value : RM242.1 million (RM1,045 psf NLA) as appraised by the Valuer as at the material date of valuation of 22 January 2020 using the investment and comparison methods of valuation
Encumbrances : The encumbrances over the master title are as follows:
(i) lease to Tenaga Nasional Berhad for an area measuring 756 square metres from 30 March 2014 to 29 March 2044 registered on 17 December 2014; and
(ii) lease to Tenaga Nasional Berhad for an area measuring 4,367 square metres from 18 July 2017 to 17 July 2047 registered on 15 July 2019
Age of building : Approximately 2 years
Surveyed floor area : 310,183 square feet
Net lettable area : 232,133 square feet
Percentage of occupancy: 97.1%