PETALING JAYA: The Menara Multi-Purpose office tower in Kuala Lumpur will be sold to the MCA for RM375mil cash.
In a filing with Bursa Malaysia, Multi-Purpose Holdings Bhd (MPHB) said it had entered into a sale and purchase agreement with MCA for the sale of the 17-year-old office tower together with 414 car park bays within the Capital Square development.
The office tower has a total net lettable area of 541,424 sq ft, and is 99% occupied with a rental income of RM2.1mil per month as of July.
The net book value of the office tower and car park bays was RM175.4mil as of Dec 31, 2010, based on the audited financial statements of MPHB.
However, a valuation by Henry Butcher Malaysia Sdn Bhd on April 20 deemed the office tower and car park bays to have a market value of RM384mil.
MPHB said its original cost of investment in the office tower from 1993 till 1996 and car park bays in 2004 was RM289mil.
Proceeds from the sale, which is due to be completed by the end of this year, will be utilised to repay MPHB's bank borrowings.
MPHB said the rationale for the sale was part of the group's asset rationalisation exercise to dispose of its non-core assets.
The group's gearing would drop to 0.88 times from 1.1 times (as of April 28) after the sale is completed.