UEM World works on REIT

UEM World works on REIT

BY JOSE BARROCK

SINCE early last year, companies under UEM World Bhd banner have been generating much interest with many of the more prominent companies, such as UEM Builders Bhd, Pharmaniaga Bhd, Opus International Group plc and Cement Industries of Malaysia Bhd (CIMA) gaining much fanfare.

UEM World itself has been under the spotlight as some of the company’s units have been tipped to win large contracts such as the building of the second Penang Bridge, and its role in developing the Iskandar Development Region in South Johor.

However, market chatter has it that there could be more happening at UEM World. It is understood that the company may rope in several large properties currently under its banner for the purposes of setting up a real estate investment trust (REIT) under its wholly-owned unit UEM Land Sdn Bhd.

It is believed that UEM World is aggressively pursuing this plan, which includes a tie-up with an Australian company.

Sources familiar with the matter say that the company has already crossed the first hurdle as the requisite approvals from governing bodies such as the Securities Commission have already been obtained for the impending REIT.

At press time it is still not clear what properties the sprawling giant, UEM World, plans to inject into the REIT, but chances are that it could involve, among others, the factories and buildings utilised by units such as CIMA, Pharmaniaga Bhd and Opus International Group, and various other properties under its belt.

It is also understood that UEM World may not undertake this initiative alone as several companies, which are affiliated to its parent, state-controlled investment arm Khazanah Nasional Bhd, may also be roped in to strengthen the REIT.

Khazanah Nasional controls about 54.4% of UEM World, via its wholly-owned unit United Engineers (Malaysia) Bhd.

Among the names that have cropped up are Khazanah Nasional’s wholly-owned subsidiary STLR Sdn Bhd, which owns Wisma Time in Jalan Tun Razak, and some buildings under the purview of Faber Group Bhd, such as Faber Towers. Faber Group is a 37.4% unit of Kahzanah Nasional, via equity owned by United Engineers.

The move is believed to be part of a bigger plan to establish UEM Land as Khazanah Nasional’s main property arm. UEM Land is the core landowner for UEM World’s aspirations as part of Johor’s Iskandar Development Region.