CapitaLand to buy 2 malls in Malaysia for up to 1.2 bln rgt

CapitaLand to buy 2 malls in Malaysia for up to 1.2 bln rgt
08.16.07, 10:21 PM ET

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SINGAPORE (Thomson Financial) - Singapore property developer CapitaLand Ltd said Friday it is buying two shopping malls in Malaysia for up to 1.2 billion ringgit.

Through its indirect subsidiary, Front Winners Sdn Bhd, CapitaLand said it has agreed to buy the 1

Gurney Plaza, a shopping mall with over 700,000 square feet of net lettable area in Penang, for up to

793 million ringgit.

Front Winners also signed an option to buy 3 Gurney Plaza, which is currently under construction and will have over 130,000 square feet of net lettable area when completed by end-2008. The option can be exercised within six years.

Separately, CapitaLand said another indirect subsidiary, Mutual Streams Sdn Bhd, has agreed to buy the Mines Shopping Fair, a shopping mall with about 650,000 square feet of net lettable area in Selangor for up to 450 million ringgit.

Mutual Streams has also signed an option to lease a 6,800 square feet land adjacent to Mines Shopping for 3 million ringgit.

CapitaLand said Gurney Plaza and Mines Shopping will form the first two seed assets for the proposed Malaysian retail-focused real estate investment trust (REIT) CapitaLand wants to sponsor.

'In line with our current REIT strategy, we have identified other quality Malaysian retail assets that will augment Gurney Plaza and Mines Shopping Fair, and form the pipeline of assets for our pure-play Malaysian retail REIT, which could possibly be listed within a year,' CapitaLand president and CEO Liew Mun Leong said.

The group has sponsored five REITs, of which four are listed on the Singapore Exchange and one in

the Malaysian bourse.