LSH Capital signs RM197.9 mil land deal with RAC for RM1.91 bil Subang Jaya project

PETALING JAYA (July 11): Lim Seong Hai Capital Bhd (LSH Capital) has entered into a conditional sale and development agreement (SDA) with Railway Assets Corporation (RAC) to acquire two parcels of freehold land measuring approximately 17.4 acres in Pekan Country Height, Daerah Petaling, Selangor for RM197.9 million in cash.

It said in a Bursa Malaysia filing that under the SDA, the group's wholly owned subsidiary, Astana Setia Development Sdn Bhd (ASDSB) would acquire the land for RM197.9 million in cash and undertake its development in accordance with the agreement.

The land comprises two vacant freehold parcels currently classified as agricultural on title and identified as commercial under the Rancangan Tempatan Subang Jaya 2035 planning framework.

Located within the Subang Jaya–Batu Tiga corridor, the site fronts the Federal Highway and has access via the New Klang Valley Expressway, Damansara–Puchong Expressway and Shah Alam Expressway, with nearby connections to the Batu Tiga KTM Komuter station, the Subang Jaya integrated rail interchange and Sultan Abdul Aziz Shah Airport.

Purchase price and funding

LSH Capital said the purchase consideration, equivalent to about RM261 per sq ft, was arrived at on a willing buyer-willing seller basis after taking into account, among others, an independent market valuation of RM202 million (approximately RM266 per sq ft) by Nawawi Tie Leung Property Consultants Sdn Bhd, the strategic location and development potential of the land, and the intended development concept.

The valuer adopted the comparison approach as its primary valuation method, with the residual income approach used as a cross-check.

The purchase consideration will be satisfied entirely in cash through an earnest deposit of 2%, a balance deposit of 3%, a retention sum of 5%, and the remaining 90% payable within three months after the SDA becomes unconditional, subject to its terms.

The deposits and retention sum have been funded through internally generated funds, while the balance purchase price is expected to be financed via a combination of internally generated funds, bank borrowings and/or equity fund-raising exercises, with the final funding mix to be determined later.

Proposed development

Based on preliminary internal estimates, the company proposes to develop the land into a mixed-use project comprising residential towers with integrated retail and/or commercial components, with an estimated gross development value (GDV) of RM1.91 billion and an estimated gross development cost (GDC) of RM1.32 billion.

The proposed development is envisaged to be carried out in phases over approximately five years, with construction expected to commence in the second half of 2027 and completion targeted for the second half of 2032, subject to obtaining the relevant approvals.

According to LSH Capital, the acquisition will expand the group's landbank in a mature Klang Valley corridor, strengthen its medium- to long-term property development pipeline and leverage transit-oriented development opportunities supported by the surrounding transport infrastructure.

The company said the proposal is not expected to have any immediate material effect on its net assets and net assets per share for the financial year ending Sept 30, 2026, as development is expected to commence only in the second half of 2027.

The proposal remains subject to, among others, shareholders' approval and approval from the Economic Planning Unit before the SDA becomes unconditional.

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