Highlight UDA to develop Tradewinds’ land bank

by **Cals** Mon 04 Aug 2014, 22:57

Highlight UDA to develop Tradewinds’ land bank

Business & Markets 2014

Written by Afiq Isa of theedgemalaysia.com

Monday, 04 August 2014 09:04

KUALA LUMPUR: UDA Holdings Bhd is close to sealing a deal with Tradewinds Corp Bhd to develop part of the latter’s 2,000-acre (4,942.11ha) land bank in prime locations in Peninsular Malaysia.

This would pave the way for a relisting of UDA Holdings, said its chairman Datuk Johari Abdul Ghani.

“We are in the process of working out the details,” he told The Edge Financial Daily.

The potential relisting of UDA is to raise fresh capital to develop Tradewinds’ land bank, located in Johor, Selangor and Penang, Johari said.

“We will then have the requisite land bank and capital needed for UDA to grow. We are looking at a listing within 24 to 36 months after the deal is agreed on,” he said.

UDA’s move to regain its listing status may be due to the difficulty raising working capital from other sources. Over the past few years, the government has repeatedly indicated its unwillingness to pump new capital into the state-owned property firm, which is mired in debt as well as a stagnating pipeline of projects.

Johari said the partnership with Tradewinds will be synergistic for both groups as well as provide a platform for the enhancement of bumiputera interests.

When he was appointed chairman in July last year, he had remarked that the relisting is a possibility for UDA, which is keen to expand its operation but is short of land bank and capital.

“Tradewinds has a huge land bank, while we have only about 250 to 300 acres at present. Financially, we do not have much gearing at the moment, while our assets are worth over RM2 billion,” said Johari.

According to Johari, the nature of the partnership with Tradewinds post-relisting is still undecided, but he has not ruled out anything.

“[It could be] an asset injection, for example. However, we do not intend to buy the land outright from Tradewinds as the funds are earmarked for the development of Tradewinds’ land bank.”

Launched by former prime minister Tun Abdul Razak in 1971, UDA had played a major role in the growth of Kuala Lumpur via strategic joint ventures with independent property developers. The group was corporatised into a public-limited company and was listed on the Kuala Lumpur Stock Exchange in 1999.

However, it was delisted in 2007 by Khazanah Nasional Bhd, which subsequently transferred all its shares to the Ministry of Finance Inc.

Meanwhile, Tradewinds was taken private by controlling shareholder Tan Sri Syed Mokhtar Al-Bukhary in August last year.

While UDA no longer receives special concessions, unlike during its heyday as an urban redeveloper, Johari was quick to point out that the group still has a mandate to increase bumiputera participation in the property sector.

“After 44 years and after developing close to 7,000ha of land, this is no longer the same UDA as before. However, we still have a mandate to serve as a platform for bumiputera stakeholders to participate in,” he said.

“We are a standalone property developer, same as the others. For example, UDA does not receive a government guarantee if it were to secure a commercial loan,” Johari pointed out.

The group is jointly redeveloping the Bukit Bintang Plaza with Tradewinds. The new project will comprise 60 storeys of luxury condominium units above a shopping mall, which will have a total gross development value of RM3 billion.

The joint venture is headed by Tradewinds chairman Mohamed Ali Alabbar and the Emaar group, which is a Dubai-based property developer.

Johari did not divulge the details, such as the role of each group and whether one of them has a majority stake.

“It’s still early days. We will announce later,” he said.

UDA has been seeking to unlock the value of its prime land assets. Apart from BB Plaza, last month the group signed a deal with Eco World Development Group Bhd and the Employees Provident Fund to develop the Bukit Bintang City Centre on the site of the former Pudu jail.

This article first appeared in The Edge Financial Daily, on August 4, 2014.