RM242.1 million Guocoland sells its tower to Tower REIT

Source: New Straits Times

Guocoland (Malaysia) Bhd’s subsidiary DC Offices Sdn Bhd is disposing Menara Guoco in Damansara Heights to Tower Real Estate Investment Trust (Tower REIT) for RM242.1 million.

In an exchange filing today, Guocoland said it had entered into a conditional sale and purchase agreement (SPA) with MTrustee Bhd for the proposed disposal.

The property is a 19-storey office building built on freehold land and is part of an integrated commercial development known as Damansara City, comprising another office building, a hotel, a retail mall, serviced apartments and car parks.

“The proposed disposal represents an opportunity for Guocoland Group to realise its investment in the property.”

Guocoland said the group would continue evaluating business opportunities in the property development sector.

“The proceeds from the proposed disposal will provide Guocoland Group with the necessary funds for existing working capital requirements,” it added.

The group said the repayment of bank borrowings from the proceeds was also expected to result in interest savings, which would improve its overall cash flow management.

In a separate statement, Tower REIT said the purchase consideration would be fully funded via debt financing.

“The proposed acquisition is in line with the objective of the manager to grow the distributable income of Tower REIT.

“It also provides its unitholders with regular and stable income distributions by expanding its existing portfolio of real estate to include quality properties with stable recurring income,” it added.