PHB looking at new asset class?

Real estate investment firm Pelaburan Hartanah Bhd (PHB) seems to have had a busy 2015. It grew its investment portfolio and set in motion development plans for two of its prized parcels of land in Kuala Lumpur.

PHB’s list of investments now stands at 22 — from around 13 in 2014 — of which 18 developments have been completed. According to its website, PHB has been actively and prudently acquiring prime commercial real estate and has accumulated property assets worth over RM5 billion.

PHB also announced a land purchase in Terengganu last year, and is believed to have bought a large tract in Shah Alam as well.

While the majority of its investments comprise office buildings, several retail assets and a few hospitals, The Edge understands that PHB is now looking at diversifying its assets for recurring income to include car parks, educational institutions and rehabilitation care facilities.

PHB made its foray into car park investment through the purchase of 1,967 parking bays at Icon City, Petaling Jaya, which is being developed by Mah Sing Group Bhd. The parking bays are spread over five levels — two basement floors, the mezzanine and Levels 1 and 2. Based on the average price of parking bays in Petaling Jaya, this deal may have cost PHB about RM100 million. Operating car parks is said to be easier to manage, with less maintenance and not as much refurbishment needed compared to an office building or a shopping centre.

PHB’s website also states that future development plans include a rehabilitation centre in Jalan Ampang, Kuala Lumpur. The centre is described as a 27-storey one-stop centre for physical rehabilitation with staying-in facilities.

PHB group managing director and CEO Datuk Kamalul Arifin Othman did not respond to calls or text messages sent by The Edge.

After focusing on asset acquisition in the Klang Valley for eight years, last year PHB widened its geographical reach, venturing northwards to Penang, eastwards to Terengganu and southwards to Melaka and Johor.

It purchased One Precinct in Bayan Baru, Penang, which is a two-storey retail podium with a two-level basement car park and a seven-storey MSC-status office, for RM120 million. In March 2015, it purchased The Shore Shopping Gallery in Melaka for RM212 million and subsequently added d’Pristine Tower @ Medini Nusajaya, Johor — a 32-storey Grade A office building atop a three-storey retail podium with six levels of parking — to its portfolio. This project is currently under construction.

In Terengganu, it bought 4.4ha of land for RM106 million.

In the Klang Valley, PHB has invested in two developments that are under construction. One is Block H of Empire City Damansara, which is being developed by Mammoth Empire Group. It is an 18-storey office building with 239,253 sq ft of net lettable area (NLA). Named the signature tower, it has 319 parking bays.

The other property under construction is Tower 6 @ Sky Park, located in Persiaran APEC, Cyberjaya. This 20-storey office building has 178,327 sq ft of NLA and 178 parking bays.

Another property PHB has purchased in Cyberjaya is Quill 18, comprising two 10-storey office buildings and a 10-storey car park building with 2,045 parking bays. Sources say the deal was done at RM450 million.

Late last year, PHB purchased a 10-acre industrial parcel and factory in Jalan 222, Petaling Jaya, where industrial gases group Linde Malaysia is located, for about RM100 million. The leasehold on this parcel is scheduled to expire in 2028. The Edge understands that PHB may have an opportunity to convert the site use to high-value limited commercial land or possibly even for residential use. It is understood that Linde’s corporate office has moved to The Pinnacle in Sunway, while the factory may be moving at the end of the year to a site in Bangi.

PHB also purchased a 51% stake in Nu Sentral Sdn Bhd for RM119.77 million, making the operator of Nu Sentral mall a wholly-owned subsidiary.

Will this buying momentum continue this year? It was reported last month that PHB continues to look for suitable properties and that it is actively pursuing new landbank for future developments. According to its website, apart from Terengganu, PHB already has land in Cyberjaya, Petaling Jaya, Klang, Tanjung Malim and Nilai.

As for its property projects, plans for the development of 19.6-acre Lot 61, Bangsar, seem to be well on their way. In October 2015, The Edge reported that PHB planned to go ahead with the mixed-use development in Bangsar, Kuala Lumpur, on the site of the former headquarters and factory of Unilever Malaysia.

Earlier this year, Dewan Bandaraya Kuala Lumpur had placed a notice on the site stating that it had received a proposal to develop the land and to convert its use to commercial from industrial. Those with objections to the proposal were told to submit their concerns by March 2, 2016. PHB received planning permission from DBKL on April 5, and land clearing has commenced.

The other Kuala Lumpur development is an integrated mixed-use development in Jalan Conlay that will be on a 6.8-acre site that used to house the office of the Kuala Lumpur Regional Centre for Arbitration. The project will include three commercial blocks comprising serviced apartments, office suites, a retail podium and five-storey car park podium. This parcel was purchased in 2012. - The Edge Property