Great Eastern Enters Residential Property Market
We recently met a former associate of ours, someone we hadn’t seen for quite a long time.
He looked well, and told us he was temporarily attached to this huge residential condo project along off Jalan Ampang, which involved Japanese construction giant Obayashi Corp. He promised to meet up with us again soon, and our interest was piqued by this new project, so we decided to find out more.
Basically, Great Eastern Life Assurance (M) Bhd, a member of Great Eastern Holdings Ltd, is one of the more established insurance companies in Malaysia. Now they are starting to enter the residential property development market with this first project launching in the middle of next year, and according to a report in the NST,
“The yet-to-be-named project, on five acres we have owned since the 1950s, will comprise 150 units housed in six blocks of three to 10 storeys. Unlike other condo projects, we will only rent out the units,” its executive vice-president and head of finance & corporate affairs Bruce Lee said.
With unit built-up areas ranging from 1,600sq ft to 6,000sq ft, the company has set rental indicatively at a modest RM4psf.
Obayashi Corp has been appointed as the turnkey developer, and Great Eastern is in the process of diversifying its investment portfolio through the purchase of viable commercial properties, especially in the Klang Valley, inline with its objective of ensuring good returns to policyholders.
As for commercial properties portfolio, the corporation owns Menara Great Eastern, Great Eastern Mall in Ampang, The Weld and Menara Weld in KL, Travillion Tower in Kuching, Sarawak, Wisma Great Eastern in Kota Kinabalu, Sabah, as well as Wisma Great Eastern Penang which is under construction, all of which valued at between RM700 and RM800 million in total.
So will Great Eastern follow the footsteps of other property players to move towards issuing REITs? Nope, according to them:
“It does not make sense for us. Typically, a company converts its assets to liquid by raising funds from the public through a REIT. We already have public funds through the premium paid by our policyholders … our job is to manage the funds so that they get better returns,” he noted.
