THE Emkay Group of companies, controlled by developer Tan Sri Mustapha Kamal Abu Bakar, said its plans to set up a commercial property trust could take two years to materialise.

Chief operating officer Peter Teh Heng Poh said the real estate investment trust (REIT) is still in the conception stage, but it is targeting to have at least 500,000 sq ft of net lettable area in the trust.

“Based on the buildings that we have, the size is already there. We are working on other details,” he told Business Times in an interview in Damansara Perdana yest e r d ay.

The REIT will likely be listed on the local bourse and will own mainly the Emkay Group’s properties in Cyberjaya as well as in Damansara initially.

Among assets to be sold into the trust is the four-storey Bangunan Mustapha Kamal in Cyberjaya, which has 121,500 sq ft of lettable area. The building has been completed and the group is in negotiations with potential tenants, Teh said.

In Damansara Perdana, the 21- storey Menara Mustapha Kamal, which is due for completion in September 2009, will also be included in the property trust.

This building will have 201,508 sq ft of lettable area and the group plans to retain four floors for its own use.

Teh said most of the upcoming buildings in MKN Embassy Techzone, a freehold IT building project on 4.1ha site in Cyberjaya, are also slated for the trust.

The so-called campus development will have clusters of specially- built office blocks for IT firms sharing some common facilities, he said. The project is modelled after a similar concept in Bangalore done by its partner, the Embassy Group of India.

“There will be four blocks under the first phase and we plan to buy more land from Setia Haruman Sdn Bhd to build another eight blocks in Phase 2,” Teh said.

Setia Haruman is the master developer of Cyberjaya and is an associate company of Emkay Group, in which Mustapha holds majority shares.

Teh said the first two blocks in Phase 1 of the Techzone that are due to be done in the next few months, will not be put into the REIT because it is already in talks with some local funds for en-bloc sale.

“There are many fund managers looking to buy the buildings because they want recurring income. If they can get a seven per cent return, they are happy,” he said.

The upcoming blocks in the first phase of Techzone should measure some 250,000 sq ft in gross built-up each, Teh added.

Other potential candidates for the trust include two 10-storey office towers within the NeoCyber mixed development project in Cyberjaya. Emkay Group plans to start construction on these towards the year-end, which will have another 260,700 sq ft lettable area.