Participation in The Exchange 106 a predetermined deal: MoF Inc

PETALING JAYA: The Minister of Finance Incorporated (MoF Inc), which confirmed the acquisition of a 51% stake in The Exchange 106 tower at the Tun Razak Exchange (TRX) through Mulia Property Development Sdn Bhd, said its participation in the project was a predetermined deal.

“The MoF Inc’s participation in the development of The Exchange 106 was agreed at the onset to only materialise when the project has reached certain development milestone,” it said in a statement today.

“The strategic location of The Exchange 106 and the iconic nature of the development gave strong impetus for the MoF Inc to participate in the development and management of the tower,” it added.

The Exchange 106, which boasts a net lettable area of 2.8 million square feet, is expected to be completed by the second half of this year.

Upon completion, it will be one of Malaysia’s three iconic structures, the other two being the Petronas Twin Towers and Permodalan Nasional Bhd’s Merdeka 118.

MoF Inc’s acquisition of the stake in Mulia Property was done through its wholly owned subsidiary, MKD Signature Sdn Bhd, in July 2017. The Mulia group owns the remaining 49% interest in The Exchange 106.

Mulia Property was incorporated in Malaysia in April 2015 and has a paid-up share capital of RM500,000. For the financial year ended Dec 31, 2016, it reported a narrowed net loss of RM3.52 million against RM78.78 million a year ago.

The company’s directors are Lai Weng Hoo, Datuk Yusof Ismail, Datuk Asri Hamidin@Hamidon, Mohd Hisyamuddin Awang Abu Bakar, and Harianto Muljohardjo.
MoF Inc said the cost of the development of The Exchange 106 will be borne by the Mulia group and MKD based on their respective proportions of shareholding in the joint venture (JV).

MKD has made arrangements with HSBC Bank for a standby line to finance its proportional construction cost of 51% without any added premium by the JV company.

Recall that Mulia Property bought the 3.42-acre land for RM665 million in May 2015 from TRX City Sdn Bhd. MoF Inc stressed that the sale of land to Mulia was done on commercial terms with no discount accorded to Mulia.

Judging from the huge potential from the entire TRX development with an expected gross development value of RM40 billion, MoF Inc said it is vital for it to secure another strategic position in the progress and success of TRX development.

Besides that, MoF Inc had also entered into a partnership with Lendlease (Australia) to develop the Lifestyle Quarter, a 17-acre mixed-use development area within the TRX. Lendlease and MoF Inc own 60% and 40% equity interest in Lifestyle Quarter.

A number of organisations have committed to take up commercial plots within the TRX, such as HSBC, Prudential Insurance, Affin Bank Bhd, Tabung Haji and Lendlease (Australia). Negotiations are under way to rope in other international organisations, according to MoF Inc.