Sime Darby Property commits RM100 mil to JV as RM798.3 mil Bukit Kerayong land acquisition moves ahead

PETALING JAYA (July 16): Sime Darby Property Bhd will inject up to RM100 million into its 50:50 joint venture with SD Guthrie Bhd to fund the acquisition of 1,021.93 acres of freehold agricultural land in Mukim Jeram, District of Kuala Selangor, marking the next implementation phase of the partners' planned industrial development corridor.

In a Bursa Malaysia filing on Wednesday, the property developer said its wholly owned unit, Sime Darby Property (Kerayong) Sdn Bhd, will subscribe for shares and provide short-term advances to Kerayong Development Consortium Sdn Bhd (JVCo) and/or its wholly owned subsidiaries. The funding will cover its 50% share of the joint venture's equity commitment for the RM798.3 million land acquisition and related costs.

The capital injection follows two inter-conditional sale and purchase agreements signed on July 15 by the JVCo's special purpose vehicles to acquire two parcels of freehold agricultural land in Mukim Jeram, District of Kuala Selangor from SD Guthrie for RM798.3 million. The acquisition will be financed through shareholder funding and external borrowings.

The acquired land forms part of Bukit Kerayong Estate, which the partners plan to develop as part of a larger industrial corridor. The broader joint venture, established under a shareholders' agreement signed in November 2025, envisages the master planning and development of a minimum of 3,000 acres across Bukit Cheraka, Bukit Kerayong and Jalan Acob in Selangor. The partners expect to invest up to RM200 million in total through equity and shareholder advances.

Of Sime Darby Property's RM100 million funding commitment, up to RM39.9 million will be provided as interest-free short-term advances, with the balance through equity injection. SD Guthrie will contribute on the same terms, reflecting the partners' equal ownership of the JVCo. The advances are intended to fund deposits payable under the land purchase and are expected to be repaid by Dec 31, 2026.

According to the filing, the land is intended for subsequent master planning and development. Sime Darby Property said the site is strategically located within a logistics corridor supported by the West Coast Expressway (WCE) and the East Coast Rail Link (ECRL), with proximity to Port Klang expected to support future industrial and logistics activities. The company also cited alignment with Malaysia's industrialisation initiatives and rising demand for industrial land as supporting factors.

In a separate press release to Bursa Malaysia on the same day, the companies said the Bukit Kerayong project is envisioned as a next-generation heavy industrial park anchored by logistics and renewable energy infrastructure. They said it would complement Sime Darby Property's Bandar Bukit Raja development and the previously announced Carey Island collaboration to form a connected industrial corridor spanning Klang, Kapar and Kuala Selangor.

Group managing director and CEO Datuk Seri Azmir Merican said the latest agreements move the partnership "from vision to execution", combining Sime Darby Property's master-planning expertise with SD Guthrie's strategic landbank to support industrial development.

The arrangement is classified as a related party transaction because Permodalan Nasional Bhd-related interests are shareholders in both Sime Darby Property and SD Guthrie. The transaction does not require shareholders' approval and is not expected to have a material effect on Sime Darby Property's earnings, net assets or share capital for the financial year ending Dec 31, 2026, although it is expected to increase the group's gearing as it will be partly funded through borrowings.

Completion of the land acquisition is subject to approvals, including from the Estate Land Board and the Ministry of Economy, and is expected in the second half of 2026.

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