EmpireCity Damansara will be fully completed in 2020.
MAMMOTH Empire Holding Sdn Bhd (MEH) has several ideas for its third project in Damansara Perdana in Petaling Jaya — one which includes developing the land in a joint venture with a reputable developer.
Group executive director Datuk Danny Cheah said another possibility is an outright sale of the land. MEH owns 18.2ha of land to develop Empire City Damansara 2 (ECD2). “We are still exploring all possibilities. We are not in a rush to start ECD2. If we are going to develop the project ourselves, we want to do it carefully and may only start its construction in 2020. ECD2 depends very much on the market environment and whether it is conducive. Our focus right now is to complete Empire Damansara City 1(ECD1),” he told NST Property.
Cheah said ECD2 would take about 10 years, and planning approval from Petaling Jaya City Council has been granted for the development. The plan is to build residential towers, offices, hotels, retail and a theme park. Initially,ECD2 was meant to be developed over 26.3ha but late last year MEH disposed of some 8ha to Asset Kayamas Group for RM236 million, or RM270.90 per sq ft. Cheah said had ECD2 remained a 26.3ha project, its gross development value (GDV) would have been between RM6 billion and RM7 billion.
Now with 45 acres (18.2ha),we will have to re evaluate the GDV potential for ECD2. We are working out the details. It will be up to the new owner if they want to make alteration or come up with new plans for the land that they have purchased. We understand Asset Kayamas is making some changes,”
As to whether it is viable to build a theme park and if it would attract the public, with few such developments already in the market, Cheah was optimistic.
“MEH will go ahead to build a theme park but we will be extra cautious when planning the development. The idea for the theme park came about after we visited the indoor Ski Dome inside Dubai Mall of the Emirates. We went to Dubai with our consultants to study the development and design.
“The plan is still there... but we will see if there is a need to revise the plan in the future.It is a good plan but depending on circumstances, we may have to review it.
“The theme-park business has many challenges. Look at the challenges some Malaysian theme-park operators are facing. In the last few months there have been so many issues... so we need to be extra cautious in terms of what we are planning for our theme park,” he said.
On whether there would an initial public offering to raise funds for ECD2, Cheah said MEH would look at various possibilities for financing, including launching a real estate investment trust (REIT) if the need arises.
“REIT is an option but it is dependable on yield.The development has to reach a certain stage
before we can explore REITs. MEH has a good track record in terms of projects and it has the capability to go for a listing, but we have no immediate plan to launch an IPO. If we wanted to launch an IPO we would have done it at the start of ECD1. There are pros and cons when we are a listed entity.We need to make quick decisions but an IPO is not suitable at the moment,” he said.
MEH’s flag ship project in Damansara Perdana was Empire Damansara, which was completed in 2013. The RM500 million project comprises offices, residential units, retail and hotels.
“We built the project in one go. Other developers would have done it differently,like develop it in several phases. The whole idea of doing it at one go is that when you sell the buildings to investors, you present the overall picture on how it is going to be when it is fully completed. For ECD1, we have our own pace to do it and for ECD2, we haven’t decided how we want to do it,” said Cheah.
He said MEH had obtained RM200 million financing from AmBank for ECD1 and it had been fully paid (fully redeemed).
The second tranch of loan from AmBank was RM300 million for construction work and to build a mall in ECD1.
“Of the RM300 million, we had paid off RM140 million in the last five years. The balance RM160 million is not even 10 per cent of the value of the mall, (which is) about RM1.75 billion. So, we are in a good financial position,” added Cheah.
No comments:
Post a Comment