Nestcon acquires Iskandar Puteri land parcels for RM95 mil, diversifies into property development

PETALING JAYA (April 10): Nestcon Bhd is venturing into property development for the first time, proposing to acquire three parcels of freehold commercial land in Iskandar Puteri, Johor Bahru for a total of RM95 million through its indirect 70%-owned subsidiary, Nestcon Iskandar Puteri Sdn Bhd.

The conditional Sale and Purchase Agreement (SPA) was signed today (April 10) between Nestcon Iskandar and vendor KLG Iskandar Puteri Sdn Bhd. 

In a Bursa Malaysia announcement today (April 10) it said the three plots — Plot F (16,437 sq m / 4.062 acres), Plot G (9,892 sq m / 2.444 acres) and Plot H (7,453 sq m / 1.842 acres) — have a combined area of approximately 33,782 sq m (8.35 acres) and are situated along Jalan Persiaran Afiat, Taman Kesihatan Afiat, in the Mukim of Pulai, Daerah Johor Bahru.

The site lies off the north side of Lebuhraya Hubungan Kedua (Laluan Pontian – Taman Johor Bahru), approximately 14.5km north-west of Johor Bahru city centre, within the Iskandar Puteri locality near the established suburban township of Bukit Indah. 

The surrounding neighbourhood is described in the valuation report as a mature area comprising township and residential development schemes with commercial elements.

All three parcels are freehold, currently vacant and unencumbered, with a category of land use classified as "building" and an approved plot ratio of 1:6 for multi-storey commercial buildings including business complexes, offices and exhibition centres. 

The parcels carry restrictions prohibiting the sale or transfer of any erected building units to non-citizens or foreign companies without prior state authority consent, and impose bumiputera resale conditions on transferred parcels.

The RM95 million purchase consideration was arrived at on a willing-buyer willing-seller basis, consistent with the independent market valuation of RM95 million assessed by Khong & Jaafar Sdn Bhd on March 12, 2026, using the Market/Comparison Approach as the primary method and an Income Approach (Discounted Cash Flow Methodology) as a cross-check. 

The audited net book value of the three plots in KLG Iskandar's books as at Dec 31, 2024 stood at a combined RM27.28 million — comprising RM13.27 million (Plot F), RM7.99 million (Plot G) and RM6.02 million (Plot H).

The purchase consideration will be settled entirely in cash: an earnest deposit paid prior to the SPA's execution, a balance deposit of RM6 million payable upon the SPA becoming unconditional, and the remaining balance of RM85.5 million payable within three months of the unconditional date, with an automatic two-month extension available. 

ACE Market-listed Nestcon intends to fund the consideration through a combination of internally generated funds and/or bank borrowings, with the proportion to be finalised at a later date.

Upon completion, Nestcon Iskandar plans to develop the land into a mixed development comprising serviced apartments and retail units, with an estimated gross development cost (GDC) of approximately RM1.03 billion, also to be funded via internally generated funds and/or bank borrowings.

The proposals — covering both the land acquisition and the formal diversification of Nestcon's business scope to include property development — are subject to shareholders' approval and all relevant regulatory approvals. 

Apex Securities Bhd is the adviser for the proposals.

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