The four deals total about RM1.21bil.
PUTRAJAYA: IOI Properties Group Bhd
(IOIProp) is purchasing Tropicana Gardens Mall in Petaling Jaya for RM680mil, in addition to three other acquisitions over the past eight months.
The four deals total about RM1.21bil, with the group saying the addition of Tropicana Gardens Mall is in line with its growth strategy and will strengthen its footprint in the retail industry, providing it with a platform to leverage its expertise.
The agreement for the mall was signed between IOIProp’s whole unit IOI Mall Damansara Sdn Bhd and Tropicana Indah Sdn Bhd, a 70%-owned indirect subsidiary of Tropicana Corp Bhd.
IOIProp said in a statement the seven-storey Tropicana Gardens Mall has a total gross floor area of 2.95 million sq ft and a net lettable area (NLA) of 1.05 million sq ft, with an occupancy rate of about 77%.
It said the mall, which is connected directly to Surian mass rapid transit station, is also accessible via four major highways.
It is within the catchment of several matured townships such as Kota Damansara, Sunway Damansara and Mutiara Damansara, as well as the upcoming Kwasa Damansara development.
“Aside from its prime location and excellent value propositions, Tropicana Gardens Mall has been in operation for four years since its opening in March 2020.
“We believe it will provide a strong recurring income as it follows the successful model of IOI Malls and leverages on its brand in providing a vibrant lifestyle experience filled with dynamic offerings,” said IOIProp group chief executive Lee Yeow Seng.
The acquisition will expand IOIProp’s mall operations in the Greater Klang Valley, complementing its two existing malls in the area, IOI Mall Puchong and IOI City Mall, currently the largest mall in the country with NLA of 2.5 million sq ft.
IOIProp’s total retail NLA will be enlarged to 5.4 million sq ft with the addition of Tropicana Gardens Mall, including its IOI Mall Kulai and IOI Mall Xiamen in China.
Other major acquisitions over the past eight months by IOIProp include the 150-room W Kuala Lumpur hotel for RM270mil, 199-room Courtyard by Marriott Penang for RM165mil, and a freehold land measuring 9.86 acres in Pantai Kok, Langkawi, for RM90.1mil.
The W Kuala Lumpur and the Courtyard by Marriott Penang were also acquired from Tropicana Corp.
The two hotels purchased will add 349 room keys to the existing 2,355, totalling 2,704 room keys of all eight hotels under the group’s hospitality and leisure segment, while the land in Pantai Kok is bought for another hotel development project.
IOIProp said these assets will allow it to have immediate presence in locations that are outside its existing operations and they will yield accretive earnings to the group’s future financial performance.
Lee said IOIProp will keep its options open for any opportunities, be they inorganic expansions or collaborative ventures, while developing its core business segments in Malaysia, Singapore and China where it has its operations.
In a separate statement, Tropicana Corp said the disposal of Tropicana Gardens Mall will enable the monetisation of the group’s investment property.
“The proceeds from the sale will be used to substantially reduce the group’s debt, thereby improving the cash flow position and reducing interest expenses.
“This transaction aligns with our strategic initiatives to monetise low-yielding landbank and investment properties, providing the financial flexibility necessary to support future growth,” it said.
As a result of the disposal, Tropicana Corp’s pro forma gearing ratio is expected to drop from 0.54 times as of Dec 31, 2023, to 0.39 times.
The sale of Tropicana Gardens Mall brings the transaction value with IOIPG to over RM1.1bil, it said.
It added that the disposal will see its gearing level to continue declining, which should enhance its financial position.
