The Star
Permodalan Nasional Bhd (PNB) can easily be counted as the biggest property baron in the country and probably among the largest in the region too. However, it has not projected itself as a global property player thus far.
Permodalan Nasional Bhd (PNB) can easily be counted as the biggest property baron in the country and probably among the largest in the region too. However, it has not projected itself as a global property player thus far.
If all the property assets under PNB were moulded into one frame, the fund could be compared to the likes of Singapore’s CapitaLand Ltd and Hong Kong’s Sun Hung Kai Properties Ltd.
Both directly and indirectly, PNB owns the biggest parcels of land throughout Peninsular Malaysia and buildings in the most strategic of locations in Kuala Lumpur.
It has swathes of plantation land that can be converted for the use of property development via listed and unlisted companies such as S P Setia Bhd, Sime Darby Property Bhd, I&P Group Sdn Bhd, Pelangi Bhd and Petaling Garden Bhd.
When Sime Darby, which is majority controlled by PNB, was merged into a single large giant in 2007, proponents of the exercise prided the entity as having the largest land bank on the outskirts of Kuala Lumpur.
It stretched from Rawang in the north right up to Nilai and Seremban in the south. Whether that potential is monetised, however, is a story for another day.
In the commercial building space, the overwhelming presence of PNB buildings in Kuala Lumpur is hard to miss.
Along Jalan Sultan Ismail, it owns the Kenanga International Building that is sandwiched between the Tradewinds Centre and the under-reconstruction Equatorial Hotel. Opposite Kenanga International, PNB owns the old Malaysia Airlines headquarters that is being converted into a service apartment and hotel.
Over at the Kuala Lumpur City Centre (KLCC) area, meanwhile, PNB has its headquarters, Darby Park, along Jalan Tun Razak, which is also a service centre. The list of buildings owned by PNB can go on. From KLCC to Damansara to Cyberjaya, it has a presence.
PNB is also an aggressive accumulator of office properties overseas, especially in London. In 2012 alone, PNB was reported to have acquired four office properties in London. Even based on the exchange rate appreciation between the sterling pound and ringgit alone, it would be sitting on handsome returns by now.
In the Battersea Power Station project in London, PNB is the major shareholder by virtue of two of its companies – S P Setia and Sime Darby – cumulatively having majority control of the project.
The mother of all office-cum-commercial buildings in PNB’s stable, however, is yet to come – the 118-storey Menara Warisan Merdeka that is being built within the vicinity of Stadium Merdeka. The contract to do the ground work was awarded two weeks ago, signalling that the fund will go ahead with the building despite concerns on the slowdown in the office space segment of the property market.
When Menara Warisan Merdeka is completed, PNB will seal its place as among the largest owners of commercial and office property in the region and Asia. In a nutshell, PNB’s portfolio of property assets makes it a global player.
However, it lacks the dynamism that comes with being a major regional property player. There is nothing really wrong if a development company lacks dynamism, but it does lead to the perception that PNB’s property assets are too big for it to handle and are hence ripe for some merger and acquisition activities.
Predators might swoop in on PNB’s stable of assets and try their luck in acquiring some of its better properties or companies on the grounds that the fund is unable to maximise what’s in its stable.
This may be far from the truth. But perception counts, especially in the business world where politics and business form a close nexus.
Within the stable of PNB’s property companies, there are two personalities who tend to lead the property thrust – Datuk Jamaludin Osman of I&P and Datuk Abdul Wahab Maskan who heads Sime Darby Property.
Both are seasoned developers and already have a big portfolio of property assets to look after.
But will they be the only faces to PNB’s property foray in and outside Malaysia?
PNB appears not to be averse to getting external help in adding value to its portfolio of assets. For instance, Goldman Sachs is one of the advisers hired to help streamline its slew of property businesses and assets.
In the same breath, shouldn’t the fund cast its net far and wide to get more professional property developers to sweat its assets then?
Until PNB displays its strength in being able to work its assets on their own, it will be a target for the well-connected. So far, the fund has managed to fend off the predators.
The case in point is the building of the 118-storey tower where it managed to stave off strong lobbying that had hoped to see the iconic building being located in 1Malaysia Development Bhd’s Bandar Malaysia in Sungai Besi.
But PNB on its own also has to show that it is willing to allow the best of professional managers to help lead its property thrust.
