This article first appeared in The Edge Financial Daily on June 30, 2017 - July 6, 2017

KUALA LUMPUR: Construction and property development group TSR Capital Bhd said it is open to selling its office tower Menara TSR, and will use gains from the sale to fund future property development projects. The office tower is located in Mutiara Damansara, Petaling Jaya, Selangor.

“Although we have never advertised the building for [sale], agents have been approaching us expressing their intention to buy it. The tower, as it is, is in a strategic location. You will not be getting these many enquiries to buy your property en bloc if it is in [Kuala Lumpur city centre],” said TSR Capital company secretary Ng Kim Leong. Ng is also a director of the company’s wholly-owned subsidiary TSR Ocean Park Sdn Bhd.

Menara TSR, about two years old and comes with 16 floors, is 94% occupied, mostly by international firms, Ng told reporters after the group’s annual general meeting yesterday.

Ng said Menara TSR is valued at about RM170 million “based on market valuation presented by the agents”.

“If we have the right price and if buyers are willing to pay a premium for the property, we will not have a reason to close our doors to negotiations. But there is no urgency [to sell]. We are still collecting rent from our tenants. But if we sell it off, we could use the gains to develop another building,” he added.

Meanwhile, through the acquisition of TSR Mutiara Sdn Bhd (formerly Satu Kahwin Sdn Bhd) last year, the group has secured a 1.25-acre (0.51ha) land situated behind Menara TSR, which can be developed into two office tower blocks with an estimated gross development value of RM220 million to RM250 million.

Originally planned as two low-rise building blocks, the group decided to redesign the planned property into high-rise office towers as such properties were deemed “more attractive”.

“We are still in the process of redesigning the property to suit the current market and will resubmit the plan for approval accordingly. It would take at least one to two years to kick-start construction works as these processes take time,” Ng said.

Asked why it had decided on an office project amid the current oversupply of office space, Ng said the company believes there will be an “influx” of tenants in the future if foreign companies — some of which have been downsizing or exiting the Malaysian market — return.

“If you look at where the land is situated, it is near Kuala Lumpur, Petaling Jaya, Bangsar and Damansara. With [entry points] such as the DASH (Damansara–Shah Alam Elevated Expressway) and Kesas (Shah Alam Expressway) highways, it would be more accessible for people to enter the area. [So,] should the [interest of] foreign [companies] come back to us (the Klang Valley) in the near future, the influx of tenants will be high,” he added.

He also shared TSR Capital will continue bidding for civil engineering projects, specifically building and infrastructure works. Its tender book is currently valued at RM3.1 billion.