The Star Business News
NST BizTimes
Is Dairy Farm cashing out or gashing out EPF?
What is the strategic plan of Dairy Farm International Holdings Ltd, the majority shareholder of Giant TMC Bhd for selling all the properties they owned in Hartanah Progresif Sdn Bhd to EPF?
What is the synergy of EPF for investing RM382 million to buy up the said properties and then rent them back to Giant?
The Star and NST frontpaged the scintilating news that Employees Provident Fund (EPF) is buying all the shares in Giant TMC Bhd's property holding subsidiary Hartanah Progresif Sdn Bhd for RM382mil. The acquisition will lead to EPF gaining ownership of all of Giant's retail properties in Malaysia.
Hartanah Progresif will be bought from Giant TMC, which is owned by Hong Kong's Dairy Farm International Holdings Ltd. The acquisition comes with a guaranteed rental income of RM32mil a year.
That translates to a gross yield of 8.3% for EPF. There will, of course, be expenses and EPF's general manager for property investment Mohamad Lotfy Mohamad Noh told the press yesterday that the net yield would be 7.5% a year.
On completion of the sale, targeted for Dec 16, Giant will enter into a long-term lease of 10 to 15 years for the properties.
Hartanah Progresif holds all of Giant's properties, namely four hypermarkets, four supermarkets, 42 small shoplots and hostels, and three pieces of vacant land.
Domestic Trade and Consumer Affairs Minister Datuk Mohd Shafie Apdal said he was confident the sale would be beneficial to EPF shareholders, as Giant's sales were expected to increase.
With the guaranteed profit, EPF was assured of investment returns, he added.
Shafie also believes that Giant, with an annual turnover of RM3bil, will not have any difficulty in fulfilling the RM32mil guarantee to EPF.
On the part of EPF, Lotfy said it “plans to grow its amount of property investments. As far as we are concerned, we intend to look at properties that give good yield. As long as the returns are good, we will explore all the options further.”
Lotfy also believes the Hartanah Progresif purchase will help EPF make its annual dividend payout. “It is an income-yielding investment, surpassing returns even of real estate investment trusts,” he said.
Dairy Farm chief executive officer John Coyle said part of the RM382mil payment would be used to develop four other hypermarkets in Sungai Petani, Sandakan, Malacca and in the Klang Valley.
RM382 million = 4-hypermarkets + 4 supermarkets + 42 small shoplots and hostels + 3 pieces of vacant land.
Is this a good buy? EPF must have had an optimistic and futuristic valuer to come up with this figure. Did the valuer knew of the initial book value? What is realised profit of Giant for the disposal on those properties?
There are so many questions that investors had to ponder. The interesting fact is that the purchase money is from the commoners. I hope EPF had done a good job and maybe, we have to pray that it is not another MBSB.
NST BizTimes
Is Dairy Farm cashing out or gashing out EPF?What is the strategic plan of Dairy Farm International Holdings Ltd, the majority shareholder of Giant TMC Bhd for selling all the properties they owned in Hartanah Progresif Sdn Bhd to EPF?
What is the synergy of EPF for investing RM382 million to buy up the said properties and then rent them back to Giant?
The Star and NST frontpaged the scintilating news that Employees Provident Fund (EPF) is buying all the shares in Giant TMC Bhd's property holding subsidiary Hartanah Progresif Sdn Bhd for RM382mil. The acquisition will lead to EPF gaining ownership of all of Giant's retail properties in Malaysia.
Hartanah Progresif will be bought from Giant TMC, which is owned by Hong Kong's Dairy Farm International Holdings Ltd. The acquisition comes with a guaranteed rental income of RM32mil a year.
That translates to a gross yield of 8.3% for EPF. There will, of course, be expenses and EPF's general manager for property investment Mohamad Lotfy Mohamad Noh told the press yesterday that the net yield would be 7.5% a year.
On completion of the sale, targeted for Dec 16, Giant will enter into a long-term lease of 10 to 15 years for the properties.
Hartanah Progresif holds all of Giant's properties, namely four hypermarkets, four supermarkets, 42 small shoplots and hostels, and three pieces of vacant land.
Domestic Trade and Consumer Affairs Minister Datuk Mohd Shafie Apdal said he was confident the sale would be beneficial to EPF shareholders, as Giant's sales were expected to increase.
With the guaranteed profit, EPF was assured of investment returns, he added.
Shafie also believes that Giant, with an annual turnover of RM3bil, will not have any difficulty in fulfilling the RM32mil guarantee to EPF.
On the part of EPF, Lotfy said it “plans to grow its amount of property investments. As far as we are concerned, we intend to look at properties that give good yield. As long as the returns are good, we will explore all the options further.”
Lotfy also believes the Hartanah Progresif purchase will help EPF make its annual dividend payout. “It is an income-yielding investment, surpassing returns even of real estate investment trusts,” he said.
Dairy Farm chief executive officer John Coyle said part of the RM382mil payment would be used to develop four other hypermarkets in Sungai Petani, Sandakan, Malacca and in the Klang Valley.
RM382 million = 4-hypermarkets + 4 supermarkets + 42 small shoplots and hostels + 3 pieces of vacant land.
Is this a good buy? EPF must have had an optimistic and futuristic valuer to come up with this figure. Did the valuer knew of the initial book value? What is realised profit of Giant for the disposal on those properties?
There are so many questions that investors had to ponder. The interesting fact is that the purchase money is from the commoners. I hope EPF had done a good job and maybe, we have to pray that it is not another MBSB.
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