KUALA LUMPUR (Dec 20): Boustead Holdings Bhd is buying multiple pieces of leasehold commercial land measuring a collective 10.74 acres (4.35ha) next to Bukit Jalil City to develop a mixed project with an estimated gross development value of RM333 million.

The group is acquiring the land from its single largest shareholder, the Armed Forces Fund Board (LTAT), which controls 60.92% of the group, for RM172.78 million, to be satisfied entirely by proceeds from a rights issue it completed on June 23.

The lands comprise a parcel of vacant commercial land (5.75 acres), a vacant car park lot (0.96 acre) and 70 parcels of vacant, terraced commercial shop plots (4.03 acres). All land leases expire on April 25, 2095.

Boustead told the stock exchange yesterday that LTAT was granted a development order by the Kuala Lumpur City Hall on May 16 this year for a mixed development comprising commercial plots, car park plots, subdivided plots for shop offices and other ancillary structures.

To start in the last quarter of 2017, the development, estimated to cost RM297 million, is expected to be implemented over three years and generate RM36 million in gross development profit, said Boustead.

Boustead plans to develop the lands into a commercial hub comprising 70 units of shop offices and a retail centre with a dedicated car park. It intends to fund the project via internal funds and/or bank borrowings.

The proposed acquisition is conditional upon the approval of the relevant state authority for the transfer of lands to Boustead.

This article first appeared in The Edge Financial Daily, on Dec 20, 2016. Subscribe to The Edge Financial Daily here.