Malton ... Sep10

It has small landbank and absence of iconic project. Its net asset value is rm1.26 as at June 30, 2010.

While Malton has been posting reasonable earnings on the back of stable revenue, it is on the lookout for new landbank. Malton is expected to exhaust most of its existing landbank in five to six years.

Speculation Matlon is poised to participate in the development of the 162ha RMAF land in Sungai Besi either directly or through Lim’s private vehicle.

The land has been earmarked for the development of a multibillion ringgit Islamic Financial centre. At the present time, 1MDB has the mandate to develop the urban renewal project in partnership with the QIA.

News has been circulating that a consortium led by 1MDB and LTAT in collaboration with either Lim or Malton, will develop the project. It has been said that 1MDB and LTAT will hold 30% equity interest each while Lim will control 40%.

Malton would be the ideal development vehicle. Given the size of the investment, an equity raising exercise will be required.

Malton has been able to tap other landbank via JV. Malton is expected to launch projects with a gross development value of up to rm1.6 billion.

Going forward, will Malton eventually benefit from Lim’s expertise and connections or will he continue to thrive without Malton?

About Desmond Lim …

Datuk Desmond Lim Siew Choon paid for a piece of land in Jln Bkt Bintang worth a recording price of RM7209 psf. He is also a well connected businessman.

Lim’s name does not appear anywhere in the transaction. But is well known fact among industry players that he controls Urusharta Cemerlang KL Sdn Bhd, the company that paid RM210 million for the parcel of land.

Urusharta Cemerlang’s chairman is Tan Sri Zaihol Mahmood who is also the chairman of Pvailion KL Sdn Bhd. Zainol is also a director of Urusharta Cemerlang Development Sdn Bhd, the company that owns 51% Urusharta Cemerlang KL, while the Qatar Investment Authority (QIA) owns the remaining 49%.

The ultimate shareholding of Urusharta Cemerlang Development Sdn Bhd is unknown. According to a companies search, the ultimate shareholder of Urusharta Cemerlang Development, which ahs a issued capital of RM29 million, is British Virgin Islands based Primehill Investments Ltd.

However, Lim had a hand in the Pavilion KL project via Malton, which was the project manager of the development which is located next to the piece of land acquired by Urusharta Cemerlang KL.

Some 11 years ago, Lim took over the redevelopment of the BBGS land via privatization project, Malaysia was still reeling from the Asian financial crisis. Funding was hard to come by, forcing original owners of the project to sell out. The property development in KL was initially given to several well connected personalities via private companies Urusharta Cemerlang and Inai Jaya Sdn Bhd.

At the time of the privatization, Urusharta Cemerlang was a vehicle controlled by late Datuk Seri Wan Adli Wan Ibrahim who sat on the board of several Berjaya Group of companies. Wan Adlu shared a passion for horse riding with former PM Tun Dr Mahathir Mohamad.

It is said Lim got the piece of land cheap because of the tough funding environment. He managed to raise private funding for the conversion of the land and erect a new building elsewhere for BBGS.

At the time, Lim was largely unknown His company Paracorp which has since been delisted. The other linked to Lim is Malton. Lim’s name has also cropped up in the Bakun Hydroelectric Project. However, he dined to comment.

Although Lim was little known then, his wife’s brother, Tan Sri Robert Tan Hua Choon was a familiar face in the corporate circles. Tan is said to be close associate of former finance minister Tun Daim.

Despite his connection with Tan, many did not think Lim would make much headway in the property sector, given that securing financing for the Pavilion KL project was tough. It was RHB Bank’s then executive chairman Datuk Seri Sulaiman Taib was given the loan to fund the Pavilion KL.

His entry cost was low when he embarked on the Pavilion KL project in 2001/2002. But when the project was completed in mid 2008, prices had shot up four times to about 1800 psf.

Lim’s big payout came when KFH not only took up 49% stake but also bought both the condominium blocks in the project. It is said the proceeds from carving out the 49% stake and selling the two high end condominium blocks were enough to fund the entire project, leaving Lim with little to worry about in terms of financing.

KFH’s 49% stake was later sold to a fund under QIA. That was the beginning of a long standing relationship between Lim and QIA. They formed a platform from which they ventured into several property development projects in Malaysia.

Armed with the cash pile from the Pavilion KL project, Lim has set his sights on bigger things in Malaysia and even in China.

Locally, the biggest venture between Lim and QIA is the proposed redevelopment of the RM5 billion Sungai Besi Airport land, which currently houses the RMAF base. The principal developer of the RMAF project is 1MDB.

What seems more certain is Lim’s involvement with Abad Naluri Sdn Bhd – the company given the mandate to develop the no shelved RM25 billion Penang Global City Centre.

In KL, apart from RMAF project, Lim is said to be eyeing the development of Chulan Square and the Seri Melayu Restaurant on a JV basis. Chulan Square comes under the City Hall while the land where the Seri Melayu Restaurant is located belongs to Tan Sri Azman Hashim.

If Lim is successful, he will control a massive piece of development stretching from Rahrenheit88 to Seri Melayu. It is said there plans to build a link between the buildings, creating a mega mall in the city.

Politically, Lim is also well connected. He was close to former PM Tun Abdullah as well and is said to be known to PM Datuk Seri Najib.