YNH awaiting approvals for RM3.4bil project

By THE STAR
PETALING JAYA: Perak-based YNH Property Bhd expects to secure relevant approvals for its proposed RM3.4bil mixed development along Jalan Sultan Ismail in Kuala Lumpur, by as early as this year.
“We hope to get the approvals for the project within the next six to nine months,” said a company official.
“Once we secure that, then we will commence the ground works for the project,” he told StarBiz.
The proposed project, which will comprise a hotel, offices and retail outlets, was initially supposed to be a 45-storey, iconic office tower development, known as Menara YNH.
In December, StarBiz reported that the company had proposed a mixed development, instead, due to the rising glut in office space within the Klang Valley.
The official from YNH said it was currently looking to secure either a five or six-star hotel operator as well as a reputable anchor tenant for the mall for the project.
“The project has a gross development value (GDV) of around RM3.4bil,” said the official. The project has had a storied past over the last 10 years. It bought the 1.2ha freehold commercial site for RM482 per sq ft or RM63mil from Pengurusan Danaharta Nasional Bhd in July 2004 and had originally planned to build a 55-storey office block, two 56-storey serviced apartment blocks and a 50,000-sq-ft retail podium with a GDV of RM880mil.
YNH then entered into a 60:40 joint-venture agreement with Singapore’s CapitaLand Ltd in December 2006 to develop a 45-storey office tower with a retail podium. However, in mid-2007, the agreement lapsed.
Subsequently, the company entered into an agreement with Kuwait Finance House (M) Bhd (KFH) in January 2008, in which the latter would buy a 50% stake in the project for RM920mil or around RM1,230 per sq ft.
YNH also received offers for the remaining half of the office tower at an even higher price even though it had initially wanted to retain the other portion.
However, KFH, beset by internal troubles and the 2008/2009 global financial crisis, backed out of the deal in mid-December 2009 as it wanted a lower price for the stake.
A week later, the Islamic bank aborted an RM237mil deal to buy the east wing of Mah Sing Group Bhd’s The Icon located along Jalan Tun Razak.
Analysts at that time said the project was crucial for YNH’s earnings visibility and could be a catalyst for the company’s share price, which has declined 31.4% to RM1.75 since June 29, 2007, around the time when the CapitaLand agreement lapsed.
The proposed new plan would still see YNH retaining a portion of the project as its headquarters. In fact, in the notes accompanying its first-quarter ended March 31 results, the company reaffirmed plans to retain 50% of the property for investment purposes.