Hong Kong, July 7, 2014 - CBRE, advisor to 1MDB Real Estate Sdn Bhd (1MDB RE)—a strategic development company owned by the Malaysian Government, helped select international property and infrastructure group Lend Lease as a major joint venture partner for the Lifestyle Quarter portion of Tun Razak Exchange (TRX), Kuala Lumpur’s highly anticipated financial district.
1MDB RE and Lend Lease have signed a binding agreement to work exclusively together to finalize the joint venture documentation and to commence work on the TRX Lifestyle Quarter. The selection of Lend Lease follows on from the appointment of CBRE Malaysia and CBRE Capital Advisors Asia Pacific in August of 2013 by 1MDB RE to bring in strategic development partners to co-develop TRX.
Lend Lease was chosen from a pool of international and local bidders for the Lifestyle Quarter, following invitation in December 2013 to participate as a strategic development partner in TRX. The six-month international standard process managed by CBRE encouraged innovative and value-added submissions, resulting in many leading edge and exciting proposals from global real estate investors and developers that will assist TRX in contributing towards the Malaysian government's efforts to make Kuala Lumpur a global city.
The TRX is a 70-acre mixed-use development in the heart of Kuala Lumpur which will encompass a new international financial and business district underpinned by world-class commercial, residential, retail, leisure and cultural offerings. It will also have a dedicated underground MRT station. The Lifestyle Quarter in TRX, a retail-led mixed-use development of over 17 acres comprising a hotel, three residential towers and a new retail mall seamlessly connected to TRX’s multi-layer central park and the MRT station.
The development of the Lifestyle Quarter is expected to attract up to US$1 billion (RM3.2 billion) in foreign direct investments to Malaysia. Lend Lease will be the majority shareholder in the joint venture while 1MDB RE will hold a significant stake. The TRX Lifestyle Quarter has a forecasted Gross Development Value of over US$2.5 billion (RM8 billion). Lend Lease and 1MDB RE have seen keen interest from new-to-market retail tenants and new-to-market international hotel brands.
Working hand-in-hand with 1MDB RE, CBRE Malaysia and CBRE Capital Advisors Asia Pacific led the international Expression of Interest exercise from start to end—from the preparation of marketing materials—upon which the project was marketed to qualifying bidders around the world—to leading and managing the competitive bidding process, the due diligence process and iterative negotiation processes between 1 MDB RE, shortlisted bidders and the eventual selected bidder. The scope of work also included the development of a multi-step assessment methodology for an extensive evaluation of bid documents across commercial and technical considerations.
“The bidding process was extremely competitive with some very high quality submissions. CBRE was able to assist in finding the most suitable investors from around the world because of our unique platform and collaboration between the local Malaysia team and the Capital Advisors team. It was our execution of the process—transparent, fair, well-structured and outcome-orientated, and demonstrating best-practice processes and evaluations—that encouraged more serious bidders and ensured the best outcomes,” commented Nick Crockett, Executive Director, CBRE, Capital Advisors, Asia Pacific.
“The TRX project is a landmark development for Malaysia that will establish Kuala Lumpur as a global city. We are delighted to have been able to assist the Malaysian government in taking it forward after having found the ideal match for the development of the Lifestyle Quarter,” said Christopher Boyd, Executive Chairman, for CBRE Malaysia.
“Attracting a global brand like Lend Lease is clear evidence of the potential and international appeal of TRX. We are very excited to move forward; a project of this scale will bring many spill-over benefits to the local economy,” said 1MDB Group CEO, Mohd Hazem Abd Rahman.
TRX has a development period of about 15 years, and will be built in demand-driven phases. The initial phase of construction, including the Lifestyle Quarter, is slated to commence in early 2015. TRX aims to be the best international business address in Kuala Lumpur and will bring together leading financial institutions and top global companies in one place, spurring growth in new areas for Malaysia to better compete on the global stage.
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