Nestcon shareholders back property debut with RM1.37 bil Johor project

PETALING JAYA (July 2): Nestcon Bhd has obtained shareholder approval for its proposed acquisition of three land parcels in Iskandar Puteri, Johor, and for the group’s diversification into property development, with both ordinary resolutions passed at its extraordinary general meeting (EGM).

The Bursa filing on June 30 said the EGM was held at DoubleTree by Hilton Shah Alam i-City, Selangor. All resolutions set out in the notice of EGM dated June 15 were carried by poll voting, with the results validated by Propoll Solutions Sdn Bhd as the independent scrutineer appointed by the company.

Johor land acquisition

Ordinary Resolution 1 relates to the proposed acquisition by Nestcon Iskandar Puteri Sdn Bhd, an indirect 70%-owned subsidiary of Nestcon, of three freehold commercial land parcels in Mukim Pulai, Johor Bahru, with a total land area of about 33,782.284 square metres for a total cash consideration of RM95 million.

According to Nestcon’s circular to shareholders, the three plots, identified as Plot F, Plot G and Plot H, are located along Jalan Persiaran Afiat in the Iskandar Puteri locality and are currently vacant commercial land with an approved plot ratio of 1:6.

At the EGM, 99.9974% of the shares voted in favour of the acquisition, with 274,880,642 shares supporting the resolution and 7,100 shares, representing 0.0026% of the shares voted, against.

The RM95 million purchase consideration was arrived at on a willing-buyer willing-seller basis after taking into account an independent valuation of RM95 million by Khong & Jaafar Sdn Bhd, which applied a market/comparison approach with an income approach cross-check.

The consideration will be satisfied entirely in cash, funded via a combination of internally generated funds and bank borrowings, including RM80.8 million in new term loans secured by the group.

Nestcon’s circular states that, upon completion of the acquisition, Nestcon Iskandar intends to undertake a mixed commercial and residential development on the land comprising serviced apartments and retail units, with an estimated gross development value (GDV) of about RM1.37 billion and estimated gross development cost (GDC) of about RM1.03 billion.

The development is proposed to be implemented in two phases from 2027 to 2032.

Diversification into property development

Ordinary Resolution 2 seeks approval for the proposed diversification of Nestcon and its subsidiaries’ existing businesses to include property development, alongside its current building and infrastructure and renewable energy segments.

The resolution received 99.9999% support at the EGM, with 274,881,642 shares voting in favour and 200 shares, or 0.0001% of the shares voted, against.

The circular notes that Nestcon’s board (save for group managing director Datuk Dr Lim Jee Gin, who abstained due to a conflict of interest) expects the proposed development to potentially contribute an estimated gross development profit (GDP) of about RM336.97 million.

The board anticipates that, over time and subject to market conditions, the property development business may contribute 25% or more of the group’s net profit and/or result in a diversion of 25% or more of the group’s net assets as further projects are secured.

The board believes the proposals will provide an alternative revenue stream to reduce dependence on the existing construction and renewable energy businesses, while leveraging operational synergies such as shared resources and technical expertise between construction and property development activities.

The circular also highlights key risks related to the proposals, including financing risk, market conditions in Johor Bahru and execution risk for the development.

SPA status

Separately, Nestcon announced that all conditions precedent under the conditional sale and purchase agreement (SPA) dated April 10, 2026 for the Johor land acquisition have been fulfilled as at 30 June 2026.

Accordingly, the SPA has become unconditional on that date.

Based on the indicative timetable in the circular, Nestcon targets to complete the acquisition by the fourth quarter of 2026, with the diversification taking effect upon shareholder approval while the group continues its existing building, infrastructure and renewable energy businesses.

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