Anyone know why?


This post has been edited by benson92: May 25 2017, 10:49 AM


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big boss no money?

PROPERTY developer and asset manager Mammoth Empire Holdings Sdn Bhd has signed on the dotted line to sell its flagship Empire Shopping Gallery in Subang Jaya, Selangor, to Pelaburan Hartanah Bhd (PHB) for RM570 million cash.

With the agreement, which was sealed late last week, MEH will be able to raise some much-needed funds and quash rumours of further delays in the completion of its behemoth Empire City Damansara project near Damansara Perdana, Selangor.

When contacted, PHB group managing director Datuk Kamalul Arifin Othman confirms that the deal was concluded late last week. “We bought it for RM570 million,” he tells The Edge.

It is learnt that MEH has been granted a call option to buy back the shopping mall on the fifth anniversary of the sale. It also has the right of first refusal to buy the mall should PHB decide to dispose of it within the five years.

However, Kamalul declined to comment when asked to confirm if the terms of the agreement included MEH’s right to buy back the mall in five years’ time. He was also tight-lipped on the minimum price that MEH would need to repurchase Empire Shopping Gallery.

Sources, nevertheless, say the price is RM670 million or the market value of the asset at the time, whichever is higher.

This means PHB will be able to make at least RM100 million in profit over five years or RM20 million a year while it holds the property. It will also enjoy the net income derived from the mall. The Edge had previously reported that the mall’s net rental yield is around 6.5% to 7%.

The Empire Shopping Gallery has a gross built-up area of 600,000 sq ft and net lettable area of 350,000 sq ft spread over five levels. A total of 216 tenants occupy 98% of the shopping centre, whose sale is expected to be completed in the next three months.

“It is a win-win situation for both parties because MEH is able to unlock the value of the asset now and yet regain ownership at a later date while for PHB, the 6.5% net rental yield is above the prevailing rate for fixed deposits, plus the guaranteed buyback is at a higher price in the future,” a valuer tells The Edge when asked for his comments.

Details of the deal are scanty. Still, its timing may raise eyebrows, considering that there is shopping mall glut at present and subdued consumer spending due to a sluggish economy. Market observers comment that as a fund that invests in real estate, PHB could have bargained for a more favourable deal. More so because MEH can choose to repurchase the mall after five years if it is still performing well — and the company has the financial muscle to do so — or not if it is not.

Interestingly, the management of the mall remains in MEH’s hands.

The Empire Shopping Gallery and the Empire Hotel catapulted MEH to fame in 2010, although the group had been operational since 2002.

The group was founded by Datuk Sean Ng Yee Teck, who is the group managing director, and Datuk Danny Cheah, who is the group executive director. Sentimental reasons aside, it is understood that MEH opted for the call option because it sees further upside for the mall as it has been operational for only six years now and has yet to realise its full potential.

An MEH spokesperson says with the deal, an earlier plan to raise funds through the issuance of bonds has been scrapped. In June last year, The Edge reported that MEH was ready to let go of the shopping mall should it receive a favourable and concrete offer. Subsequently, in August, The Edge reported that MEH was looking at raising funds via bonds and had engaged Hong Leong Investment Bank Bhd and credit rating company RAM Holdings Bhd for the exercise.

The spokesperson adds that the bulk of the money from the sale will go towards the completion of Empire City Damansara while the remainder will be used as working capital. The 28-acre integrated development with an estimated gross development value of RM5 billion is located opposite the PJ Trade Centre in Mutiara Damansara.

Incidentally, PHB had purchased from MEH an 18-storey office block with 319 parking bays, known as Block H, in Empire City Damansara for, according to sources, RM120 million.

The spokesperson also says MEH plans to move into Block H on April 17 this year. “The CCC (certificate of completion and compliance) for the building is expected to be awarded in February. We will be moving from our current headquarters in Empire Subang to Empire City Damansara as we will have a much larger component to take care of. We will be taking up five levels in the building.”

PHB is understood to be looking for tenants to fill the other floors.

On the two million sq ft retail component of Empire City Damansara, whose opening has been delayed several times, the spokesperson says, “We are targeting a partial opening in August to coincide with the 29th SEA Games.” Acknowledging that a few tenants had dropped out due to the delay, he says there have also been requests from some tenants to postpone the opening. Even so, the Empire City Damansara mall has managed to secure 80% tenants. One of the three Marriott International hotels will be ready by year end, the spokesperson adds.

He dismisses speculation that Empire City Damansara may not be ready to host the SEA Games’ ice-skating event this August. In fact, he says, the venue will be handed over in April or May this year for the participants to start their training. This is the only ice-skating rink with Olympic specifications in Malaysia.

By the time the Games start, there will be no sign of the cranes, he adds. “All the physical and structural components will be completed. There will be no more construction activity when we open.”

This article first appeared in The Edge Malaysia on Jan 30, 2017.

This post has been edited by tahfeikei: May 25 2017, 10:51 AM

lol not even 3years right?

Overrated

overpriced bread

but their biz quite good, esp the Sungei Wang area.

so sad, tried in vietnam and korea

better than malaysia's ... their coffee in malaysia taste so bad

i think so

yes but overpriced still got ppl go

agree, korea i tried before, not bad

kolos je... masih banyak brand lain lagi...

should be $

rumours been running round since the stalling of the mega project 2+ years ago

bangsar got branch?

Loaf & Lavender not overpriced?

whole malaysia branch closed or only empire shopping gallery?

Tealive boss should carry this brand

same la, but lavender bread ok wo

best place to chill for me while im in that area...

1st dating location with my wife back in 2014...

Korean but with French name.

memories

got, near the nasi kandar shop.

A lot of shops kolos.

Recently Korean chicken Pelicano also close.

Sign of bad times?