YNH Property Bhd is delaying the sale of part of a RM2.1 billion tower being designed by Norman Foster as the global credit crisis threatens the Malaysian capital's biggest commercial property transaction.
The company may scrap plans to raise as much as RM1.2 billion by selling the second half of the project and is in talks with funds from Singapore, Hong Kong and Japan on a venture to help complete development of the tower.
The company is delaying completion of the RM920 million sale of the first half of the 45-storey office development to Kuwait Finance House (Malaysia) Bhd, agreed to in January 2008, because of design changes.
Malaysian real estate prices may stall as the supply of office space will increase from 2010. A lot of supply will hit the market in Kuala Lumpur, so not sure whether they can demand a good price by that time. Supply is going to come in by the end of 2008 and the momentum is going to peak by 2011. The dynamics of supply and demand by that time is not going to be favourable for developers."
There will be an additional 24.8 million square feet of office space after 2010, compared with existing capacity of 56.8 million square feet.
The developer is negotiating with funds that may take a 20 per cent stake in a venture to develop the tower. Investing in the venture will allow the funds to receive earnings from rental while they wait for property markets to recover. They may then sell the building to a real estate investment trust.
YNH in January 2008 agreed to sell the first half of the development to Kuwait Finance. The sale will be completed by year's end (2008), later than planned, so the buyers can "make sure everything is right". The Grade A tower in Malaysia will have a retail podium and two office wings with total lettable space of 1.2 million square feet.
YNH plans to increase 2009 profit by 20 per cent to as much as RM120 million next year, based on RM300 million of sales.
22 hours ago
2 comments:
Most companies have to shelf their business and funding plans. these will not good for employment and financial sector.
At this situation, most of the company will try to cut whatever cost they can save for the company.
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