KUALA LUMPUR: Oxley Holdings Ltd's proposed sale of its Grade A office tower at Oxley Towers KLCC in Jalan Ampang to Alliance Bank Malaysia Bhd for RM405.84 million is a strategic move, according to market insiders.
"At least, Oxley doesn't have to worry about leasing the office spaces to many different tenants given the current market conditions or finding the right property manager," a market insider told NST Property under the condition of anonymity.
He said that while it may not be the best price for Oxley, given the bare office units (with minimal finishing) and the large total purchase area, the developer would still make some money.
"If the price includes the duplex units, then the sale would translate to RM1247 per square foot (psf), and RM1,285 psf if it excludes the duplex units, which is still a fair price given the current weak market sentiments," he said.
Oxley Towers KLCC is spread across a 3.11-acre plot that Oxley purchased in 2014 for RM446.7 million.
The multi-billion ringgit development includes two hotel towers with residences, the office tower, and a two-storey retail podium that connects all three towers. It's right next to the famous Petronas Twin Towers.
According to Oxley's official website, the hotel towers with residences will be the world's first SO/ KL Residences, and Malaysia's first SO/ Sofitel, a French-style luxury hotel.
Alliance Bank is buying the office tower and four adjoining retail lots, which include two duplex units on the first floor and two units on the ground floor of the retail podium, for a total floor area of 9,569 square feet.
It has entered into a Sale and Purchase Agreement with Oxley Rising Sdn Bhd for the acquisition.
According to Oxley's Singapore stock exchange filing yesterday, the 24 floors of the strata-titled office run from Levels 6 to 29 and have a gross floor area of 315,711 sq ft.
The property will be granted a temporary occupation permit in 2024.
Alliance Bank said in a Bursa Malaysia filing on Monday that it plans to relocate its corporate office to the Oxley tower, which will improve its visibility and branding due to the properties' strategic location in KLCC's commercial centre.
"The properties are earmarked as green-certified buildings, and this will form part of the bank's sustainability journey to be a more sustainable and resilient organisation," it explained.
The office tower is scheduled to be completed by the end of November 2024, which is also when the acquisition will be completed.
Alliance Bank's registered corporate head office is currently located at Menara Multi-Purpose, Capital Square, Jalan Munshi Abdullah, Kuala Lumpur.