The UAE's Al Batha Group has acquired a 40 per cent stake in Malaysian property firm, Bukit Kiara Capital. The deal, which is worth about Dh44 million (US$11.9m), will see the companies jointly develop three projects in the Malaysian capital of Kuala Lumpur worth a combined Dh735m. Al Batha Group is a privately-owned firm which focuses around 7 per cent of its business on property development in the UAE, with its main projects being in Sharjah.
At a time when some major UAE developers are looking to invest in foreign companies as a way to gain a foothold in overseas markets, the deal is a strategic move by Al Batha to grow the business globally. The group is also eyeing more opportunities in the Asia Pacific region, as well as potential deals elsewhere in the world. "It's an important step for us into the global market, where we want to have operations and strategic partnerships with foreign companies," said Rainer Joechen, the group managing director of Al Batha Group.
"As for Malaysia, the banking system is very well developed, the government is supporting foreign investment and it has an economy which is developing very well." Mr Joechen added that the company was confident of its investment, despite the global economic slowdown. One of the three projects to be developed is VERVE Suites, a residential development in Mont Kiara, a suburb of Kuala Lumpur. "We are confident we will master any difficult phases in order to develop a long-term business. But it is extremely difficult at this time to give visionary predictions for say the next three years," said Mr Joechen.
Investments by Gulf firms in the Malaysian property market has gathered pace in recent years. Among them is the Dh73.4bn Iskander Financial District, which is being developed by a consortium led by Abu Dhabi's Mubadala Development Company and including Aldar Properties and Millennium Development at Medini, a mixed-use urban project being built on the southernmost tip of Malaysia on the border with Singapore.
The consortium, called Global Capital, will develop six of nine clusters at the project, while another consortium led by Kuwait Finance House will develop the remaining clusters. "To some extent Malaysia has been a little bit more conservative, and therefore has a smaller market versus say Singapore, the US or UK," said NK Tong, the group managing director of Bukit Kiara Properties. "Such markets have been more obvious and opportunity-serviced, so people have rushed there. But as a period of consolidation happens, everyone will be more reflective and will start to look for better value, and I think that's when they'll start to discover Malaysia, and specifically Kuala Lumpur."
agiuffrida@thenational.ae
