DRB-Hicom group managing director Datuk Seri Syed Faisal Albar says the transaction will signify a shift in focus for its properties sector
KUALA LUMPUR: DRB-Hicom Bhd
is undertaking a corporate exercise which will see it shifting its focus for its properties sector in a RM1.90bil deal which will involve a land swap and enabling it to receive a one-time gain of about RM849mil.
The diversified group announced on Thursday that it had disposed of a large portion of its non-industrial property assets and its entire hospitality portfolio.
The move will enable DRB-Hicom to take advantage of its experience in the development industrial properties.
DRB-Hicom said it would dispose of several subsidiaries owning some 2,200 acres of land, as well as its entire equity in Horsedale Development Bhd and Rebak Island Marina Bhd to Prisma Dimensi Sdn Bhd (PDSB) – owned by a tycoon who is involved in properties and other businesses.
“The deal is estimated to be worth RM1.9b, and will be satisfied via a cache of landbank in Johor totalling 1,243.45 acres belonging to PDSB and Kelana Ventures Sdn Bhd (KVSB), and the balance through a cash payment of RM289mil,” it said.
DRB-Hicom group managing director Datuk Seri Syed Faisal Albar says the transaction will signify a shift in focus for its properties sector, aiming to leverage the group’s vast experience in industrial property development.
“Subject to regulatory and governmental approvals, the sale of the companies and the land assets will net DRB-Hicom a one-time gain estimated to be about RM849mil,” it said.
Among the significant industrial areas developed by DRB-Hicom include Hicom Industrial Estate in Shah Alam, Glenmarie Industrial Park also in Shah Alam and Hicom Pegoh Industrial Park in Alor Gajah, Melaka.
The deal expands the group’s industrial landbank to some 1,800 acres.
DRB-Hicom’s existing industrial land bank is located in Kedah, Perak and Melaka, totalling approximately 600 acres. Part of its land bank in Perak and Melaka are being developed as industrial parks, including the recently launched National Automotive Cluster @ Proton City in Tanjung Malim, Perak.
Significantly, the exercise sees DRB-Hicom exiting the hospitality industry, with the sale of Rebak Island Marina Berhad, the owners of Vivanta Rebak Island Resort by Taj located on Rebak Island, Langkawi, and Holiday Inn Glenmarie Kluala Lumpur and Glenmarie Golf & Country Club, both situated next to each other in Glenmarie, Shah Alam. The Lake Kenyir Resort Taman Negara in Terengganu, closed in 2016 is also part of the asset disposal.
“Having a core focus for each of our main sectors is important. While there is potential of course in the hospitality industry, we feel that DRB-Hicom’s strengths lie in different areas. This exit will allow us to have a leaner and more focused properties portfolio, making it easier to harness these strengths and push towards excellence in industrial property development,” Syed Faisal said.
DRB-Hicom says it expects the transaction to be completed within the first quarter of 2019, subject to obtaining all regulatory approvals.
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