The land would be developed into premium serviced apartments.
PETALING JAYA: Mah Sing Group Bhd
is making its sixth land purchase this year at a 20% price premium as it offered to buy S P Setia Bhd’s 5.99 acres of land in Johor Bahru for RM156.8mil.
The land would be developed into premium serviced apartments targeting Singaporeans and other foreign buyers, Malaysians working in Singapore and first-time homeowners.
In a filing with Bursa Malaysia, Mah Sing told shareholders it is acquiring two freehold land parcels in Taman Pelangi, making it the third land purchase in Johor.
Dsara Sentral Sdn Bhd, a wholly-owned subsidiary of Mah Sing, entered into a sale and purchase agreement with Pelangi Sdn Bhd, a subsidiary of S P Setia, for the purchase.
In a separate filing, S P Setia said it will make an estimated gain of about RM107.8mil from the land sale, undertaken at RM600.90 per sq ft.
It added the price tag of RM156.8mil represents a 20% premium based on a valuation done by an external party. The land sale is decided via a tender process.
Mah Sing, on the other hand, said it is unable to disclose the net book value of the parcels of land as it is not privy to the information. The 5.99 acres of land is located just 3km from the Bukit Chagar Rapid Transit System Link Station.
The two land parcels will be developed into M Grand Minori, a high-rise project with some retail units, with an estimated gross development value (GDV) of RM1.5bil.
M Grand Minori plans to offer serviced apartments with starting prices from RM328,000. The proposed land acquisition is expected to be completed in the first half of 2025. The project is expected to be developed over a span of four to five years, while the registration of interest for M Grand Minori is expected to begin in the second quarter of 2025.
With six land purchases done in 2024 alone, Mah Sing said the total GDV of all six parcels of land add to RM5.8bil.
Meanwhile, S P Setia said the proceeds from the land disposal are expected to be utilised for investment into strategic projects, working capital and the repayment of bank borrowings.
The proposed disposal is in line with the S P Setia’s direction to optimise and rebalance its land bank and move towards an asset-light structure and achieve an efficient capital structure.
“The group continues to own a substantial remaining undeveloped landbank of 1,123 acres in the Southern Region, which is poised for further development in the next 10 years. The group’s primary focus is to develop its landbank in the Southern Region into industrial estates which will comprise upcoming eco-industrial parks, and township developments,” it noted.
Upon the completion of the disposal, S P Setia’s net assets and cash balance will increase by RM107.8mil and RM118.5mil, respectively, it said.
