Mah Sing plans RM2.26 bil MS Industrial Park @ Kulai via land deal

PETALING JAYA (July 8): Mah Sing Group Bhd is proposing to acquire about 419.17 acres (1,696,288 sq m) of freehold land in Mukim Senai, Daerah Kulai, Johor, for RM273.87 million cash via its 60%-owned subsidiary M Industrial Development Sdn Bhd (MID), for the proposed MS Industrial Park @ Kulai, which has an estimated gross development value (GDV) of approximately RM2.26 billion.

It said in a Bursa Malaysia filing yesterday that the land is being acquired from Aura Muhibah Sdn Bhd. This is according to a circular to shareholders dated the same day (July 7).

419 acres of freehold land

The circular describes the asset as approximately 419.17 acres of freehold land in Mukim Senai, Daerah Kulai, to be acquired in a single transaction by MID from Aura Muhibah for a total purchase consideration of RM273,869,298.30 in cash. The implied land cost is about RM653,000 per acre based on the stated area. The land is intended to form the site of the proposed MS Industrial Park @ Kulai, an industrial development with an estimated GDV of RM2.26 billion.

Mah Sing outlines a product mix comprising cluster, semi-detached and detached factories, together with warehouses, logistics hubs, data centres and supporting industrial facilities. The proposed industrial development is expected to be undertaken in phases, subject to approvals from the relevant authorities. Upon completion of the proposed acquisition and the earlier proposed acquisition referred to in the circular, Mah Sing’s total landbank is expected to increase to approximately 2,682.51 acres.

Price basis, funding and effects on capital

According to the circular, the purchase price was arrived at on a willing-buyer, willing-seller basis after arm’s-length negotiations, taking into account factors such as the land size, location and comparable market evidence for industrial land, as well as MID’s development plans for MS Industrial Park @ Kulai.

The acquisition consideration will be satisfied wholly in cash. Mah Sing intends to fund the purchase through a combination of internally generated funds and bank borrowings, with the final funding mix to be determined based on the group’s gearing level, interest costs and overall capital management strategy.

The proposed acquisition is not expected to have any effect on Mah Sing’s share capital as the purchase consideration will be satisfied wholly in cash. It is also subject to conditions precedent set out in the sale and purchase agreement and the circular, including approvals from relevant authorities and Mah Sing shareholders.

The KLK Land collaboration

Mah Sing positions the Senai land acquisition as part of its strategy to expand its industrial development portfolio, complementing its existing residential and commercial projects. The circular highlights MS Industrial Park @ Kulai as a key industrial initiative, leveraging the land to offer various factory formats, warehousing, logistics, data-centre space and supporting industrial facilities.

The circular states that the proposed development is intended to leverage KLK Land’s experience and sustainability initiatives, with the collaboration aimed at supporting sustainable industrial development and attracting investment into the Johor–Singapore Special Economic Zone (JS-SEZ). Mah Sing notes that the proposed acquisition and development are expected to contribute positively to the group’s future earnings and cash flow, in line with the rationale set out in the circular.

Risk factors

The circular sets out risk factors associated with the proposed acquisition and development. These include risks of delays or non-completion of the acquisition, financing risk, and risks relating to the conversion of the land use category and securing necessary planning and regulatory approvals.

The circular also outlines the measures the group intends to undertake in managing these risks.

Strategic push into the JS-SEZ

For property readers, the proposed acquisition is significant because it underpins a named industrial project — MS Industrial Park @ Kulai — with a defined industrial development concept set out in the circular, rather than a standalone land acquisition. The transaction also illustrates Mah Sing’s continued expansion of its industrial development portfolio through a large freehold industrial site and a collaboration framework with KLK Land that the circular positions around sustainable industrial development and investment into the JS-SEZ.

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