BOUSTEAD Holdings Bhd is actively seeking a buyer for a 2.94-acre parcel in Jalan Cochrane, Kuala Lumpur, to unlock the value of the asset and enhance its cash flow.

The government-linked company had already put two valuable assets in Jalan Bukit Bintang up for sale — one last year and the other this year — and hopes to get at least RM147 million for the Cheras land, located a short walk from its MyTOWN shopping centre.

The Edge recently sighted an information memorandum on the sale.

When contacted, a Boustead spokesperson says, “We can confirm that on Nov 1, 2019, we sent a letter of invitation to selected registered real estate agents to identify interested buyers for the parcel of land located at the intersection of Jalan Cochrane and Jalan Shelley in Kuala Lumpur, opposite MyTOWN.

“The land is for sale on an ‘as-is’ basis, subject to restrictions in interest and conditions in the document of title at a minimum price of RM147 million before taxes, if any.”

The spokesperson adds that Boustead has been receiving numerous offers for the land since 2018. “However, the offers were deemed not attractive. In November 2019, the decision was made to actively seek a buyer.”

The sale is aligned with Boustead’s continuous drive to effectively manage its assets and extract the best value from its investments, according to the spokesperson. “The sale of this asset is expected to further enhance our cash flow and unlock value.” 

The property division is involved in various aspects such as development, investment, project and property management, the spokesperson says. “This includes the buying and selling of assets, which is part and parcel of our principal activities and as a matter of course for our property business.

“Hence, the sale of this property (Jalan Cochrane) or any other property that we may have in mind to dispose of, is with a view to strengthen our portfolio and extract the best value from our investments.”

Citing the example of the Mutiara Damansara township in Selangor,  the spokesperson says Boustead retained certain land parcels such as one The Curve sits on,  even as it sold other plots to Tesco and IKEA. “As such, we have undertaken a similar strategy with our Cochrane township.”

The sale of property would enable Boustead to unlock its value via monetisation or in a joint venture with partners with strong financial resources and more defined expertise, the spokesperson says. Pooling resources would migitate risks, and, at the same time, provide a catalyst and variety to the developments it is involved in.

The Jalan Cochrane land is registered under Mutiara Rini Sdn Bhd, the shares of which are owned by Boustead Properties Bhd except for 1,000 shares held by Boustead, the parent of the latter. Mutiara Rini has held the land, designated for commercial use, since November 2012.

According to the information memorandum, the land has a freehold title with a plot ratio of four. At RM147 million, the price for the 127,865 sq ft parcel works out to RM1,150 per sq ft.

In the financial year ended Dec 31, 2018, Mutiara Rini registered a 16.5% decline in revenue to RM266.39 million. Net profit, however, improved 43.68% to RM139.79 million. Total liabilities stood at RM995.61 million, of which RM985.83 million are current, while retained earnings amounted to RM608.99 million.

Mutiara Rini also owns 50% of Boustead Ikano Sdn Bhd, and wholly owns Boustead Curve Sdn Bhd as well as Damansara Entertainment Centre Sdn Bhd.

As for Boustead, it incurred a loss of RM469 million on revenue of RM10.19 billion in FY2018 — its first net loss in 17 years.

As at Sept 30, total borrowings stood at RM8.19 billion with short-tem borrowings at RM4.55 billion. Cash balances and current receivables amounted to RM1.16 billion and RM1.42 billion respectively.

Earlier this month, The Edge reported that Boustead had invited bids for two adjacent parcels measuring 1.71 acres at the corner of Jalan Bukit Bintang and Jalan Pudu and set a collective reserve price of RM172 million. The offers received under the tender exercise, which closed in July, were ”not up to expectations” and the matter was put in abeyance. Nevertheless, the government-linked company continues to receive interest and as such, is evaluating its options although a decision has yet to be reached.

This parcel is located diagonally across from the Royale Chulan Bukit Bintang Hotel. Boustead inked a deal to sell the hotel in February last year to Singapore-listed Hotel Royal Ltd for RM197 million. The sale has yet to be completed.