High Interest Rate Scuttled Genm S Sale Of Miami Land Says Report

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GenM paid US$259 million (RM789.95 million) for the property in the Miami waterfront in 2011. (miamigov.com pic)PETALING JAYA: Genting Malaysia Bhd (GenM) may have fallen victim to the rising interest rate in the US.
According to the latest reports, Smart Miami City LLC, the prospective buyer of its prime waterfront property in Miami, had pressed the pause button on the purchase in June because it considered the price too high in the current high interest rate and tight credit environment.
However, it remained interested in the property, according to a report by theedgemalaysia.com, citing another report in the Wall Street Journal (WSJ).
The US Federal Reserve raised interest rate to 4.5% to 4.75% in January but paused at 5% to 5.25% at its last meeting in June. However, most economists expect the Fed to raise it by another 25 basis points (bps) to 5.25% to 5.5% when it meets again next week.
In a filing to Bursa Malaysia on June 22, GenM said its plan to sell the four parcels of land it owns in Miami for a total of US$1.255 billion (RM5.433 billion) had fallen through.
It said then that Smart Miami City “had requested an extension of the exclusivity period and sought amendments to the commercial terms of the sale and purchase agreement”.
However, the request was not granted, leading to Miami Smart City’s decision to end the bid. Nonetheless, it remains interested in the Miami land, the GenM filing said.
The sale of the 16-acre (6.5ha) property was said to be part of a plan to make way for GenM’s bid for a gaming licence in downstate New York.
The WSJ report also quote Related Group CEO Jorge Perez as saying that he “passed” on the deal because GenM wanted to be paid the full sum upfront. Related Group is one of Miami’s largest developers.
The report by theedgemalaysia.com also quoted Michael Fay, the managing director of Avison Yong, the the broker representing GenM, as saying that “there’s been no break in the receipt of offers, even above US$1.2 billion”. - FMT

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