25 August 2008

IOI buys Menara Citibank?

It seems the property market in the capital is still very bullish. A particular news article in TheEdgeDaily reported that IOI Corporation Bhd had outbid at RM800million for Menara Citibank. Taking into account the nett lettable space of 750,000 sf, the building would have sold for over RM1,050psf!

The building was built by the LION Group way back in 1994 (that's close to 15 years old) and was 50% sold to Citigroup in 2000. For the owners to sell it today for RM1,050psf would mean a very hefty profit figure.

For a industry-standard of 8% yield, rentals would have to fetch an average of RM7psf/month in order to cover the sales figure. I'm not sure how much the rentals are fetching at Menara Citibank - but I reckon the market rates should be around there.

KUALA LUMPUR: IOI Corporation Bhd is believed to have succeeded in its bid to purchase Menara Citibank from Citigroup-associated Inverfin Sdn Bhd. Sources said IOI Corp would buy the building for RM800 million after outbidding two others.

While details weren't available at press time on the identity of the other two bidders, a local media report last week said they included a "private equity fund and a Korean fund". The building would likely fetch between RM1,000 and RM1,200 per sq ft, the news report said.

Inverfin's major shareholders are Citigroup's unit Menara Citi Holding Company Sdn Bhd (50% stake), Singapore property developer CapitaLand Ltd (30%) and Amsteel Sdn Bhd (20%).

The CapitaLand website stated that the 50-storey freehold Menara Citibank had a net lettable area of 69,379 square metres (746,789 sq ft) as at Dec 31 last year.


Post a Comment