Update Parkson to dispose KL Festival City Mall for RM349 million

by **Cals** Wed 20 Aug 2014, 01:04

Update Parkson to dispose KL Festival City Mall for RM349 million

Business & Markets 2014

Written by Liew Jia Teng of theedgemalaysia.com

Tuesday, 19 August 2014 21:31

KUALA LUMPUR: Parkson Holdings Bhd is selling KL Festival City Mall for RM349 million in cash, as the shopping mall is not big enough to drive the department store group’s expansion plans, the group said.

In a filing with Bursa Malaysia today, Parkson and its wholly-owned subsidiary Festival City Sdn Bhd have signed a conditional sale and purchase agreement (SPA) with Festival Mall Sdn Bhd and AsiaMalls Sdn Bhd, for the disposal of the mall.

Festival Mall and AsiaMalls are owned by Pramerica Asia Retail Ltd — one of the largest private open-end property funds in Asia, with an aggregate gross asset value of over S$3 billion as of June 2014. Pramerica has investments in 11 retail properties in Singapore and Malaysia.

KL Festival City Mall is a three-level shopping mall constructed on a 99-year leasehold commercial land at Setapak, Kuala Lumpur. It has a total net lettable area of some 487,342 sq ft, with a current occupancy rate of about 99%.

The property recorded an audited revenue of RM39.6 million (inclusive rental income of RM37.4 million) and profit after tax of RM12.1 million, for the financial year ended June 2013.

The net book value of KL Festival City Mall was RM224.5 million, based on the audited financial statements as at June 30, 2013, while the original cost of investment of the property was approximately RM246 million. The mall was acquired by Parkson in March 2008.

Parkson told the local bourse that as it is embarking on the construction of premium shopping malls (with net lettable areas of about 1 million sq ft), KL Festival City Mall is deemed small to drive the group’s expansion plans.