Commerce International Merchant Bankers Bhd(CIMB) failed in its second attempt to recover its loan to Metroplex Bhd by auctioning the company’s property.

Details:
Auctioned property:

• Putra Place, which houses The Mall shopping complex, the five-star Legend Hotel and an office tower.
• Its reserve price was set at RM634.5 million. 
• The Mall comprises eight levels of podium retail/shopping units. The Putra Place office tower covers the tenth floor to the 33rd floor, while the 25-storey Legend Hotel includes serviced apartments and penthouses.The freehold property with 193,621 sq ft space has 1,323 parking bays. 
• The first auction was in April 2008 at a reserve price of RM705 million. As no bids were received, the price was reduced by 10 per cent to RM634.5 million.Despite heavy publicity like in the local dailies, advertisements were placed in the LA Times, The Wall Street Journal and the Jakarta Post, the second time auction was not successful

According to real estate experts:

• The commercial property, which is opposite the Putra World Trade Centre in Kuala Lumpur, did not draw interest at the public auction yesterday because of its value and size.
• Real estate agent Previndran Singhe of Zerin Properties said it was rare for people to buy big-ticket items that go under the hammer. The purchaser(s) would prefer the deals to be done via tender or private treaty, adding that interest in a property on auction would not just depend on where one advertised but also how one advertised. The notices section in a publication tends to serve as information rather than a marketing effort.
• Regroup Associates Sdn Bhd managing director Allan Soo agreed saying that when large amounts of money were involved, the buyer would normally opt to do due diligence.
• An industry player who acquires assets on a regular basis said that for an acquisition of the size of Putra Place, one would need to be informed of the risks and that there should be full disclosure like for examples: tenancies, tenures, provision for bad debts, running costs, and age and status of the mechanical and engineering and whether additional capital expenditure would be involved.

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