KUALA LUMPUR: The Qatar Investment Authority (QIA) is set to buy a stake in a retail mall being developed by Malton Bhd in Bukit Jalil, Kuala Lumpur.

Malton said QIA has informed the group that it has obtained approval in principle from its investment committee to work towards participating in the ownership of Pavilion Bukit Jalil.

This, however, is subject to the completion of a due diligence and execution of legal definitive agreements, Malton said in a filing with Bursa Malaysia yesterday.

The possible entry of QIA as a shareholder of Pavilion Bukit Jalil comes after a previous effort by Malton to get Pavilion Real Estate Investment Trust (Pavilion REIT) to participate in the ownership of the mall.

Pavilion REIT had initially accepted the offer that was made last August, but on Jan 17, Malton announced that the trust has since decided not to take up a stake in the mall. No reason was offered for the about-turn.

Both Malton and Pavilion REIT are linked to property tycoon Tan Sri Desmond Lim Siew Choon, who is a substantial shareholder and chairman in both entities.

Lim owns 37.4% of Malton through Malton Corp Sdn Bhd, and 27.9% of Pavilion REIT, making him the second-largest shareholder in the REIT after QIA’s subsidiary Qatar Holding LLC, which owns a 35.74% stake.

Last July, The Edge Malaysia weekly, quoting sources, reported that the Canada Pension Plan Investment Board was in talks with Malton on the possibility of buying a stake of up to 49% in the Pavilion Bukit Jalil.

Pavilion Bukit Jalil comprises a one-block retail mall with five levels of retail space and two levels of basement parking. The mall, scheduled to open in the third quarter of 2020, will have a net lettable area of 1.8 million sq ft.

The mall is part of the wider Bukit Jalil City project, with a gross development value (GDV) of RM4 billion, which is being undertaken by Malton's wholly-owned subsidiary Pioneer Haven Sdn Bhd.

Bukit Jalil City is jointly developed by Malton and Ho Hup Construction Co Bhd, with Malton bearing the entire development cost while Ho Hup provides the land and is entitled to 18% of the estimated GDV of RM3.4 billion.

Malton’s share price gained two sen or 3.92% to 53 sen yesterday, giving it a market capitalisation of RM279.92 million.

Pavilion REIT, meanwhile, closed two sen or 1.21% higher at RM1.67, valuing the trust at RM5.07 billion.