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KUALA LUMPUR: In a related party transaction involving its parent Mulpha International Bhd (MIB), Mulpha Land Bhd (MLB) will undertake the development MIB’s land and headquarters in Petaling Jaya into high-rise serviced residences.
Located in Section 13 in Petaling Jaya, the property is currently vacant as MIB has moved to its new headquarters in Menara Mudajaya in Mutiara Damansara. MIB holds a 67% stake in MLB.
With a gross development value of about RM200 million to RM250 million, work on the development is expected to commence in the first half of 2015 and be completed three years later, MLB said in an announcement to Bursa Malaysia two days ago.
MLB will buy the two-acre (0.81ha) tract of land from Mulpha Properties (M) Sdn Bhd (MPM), a wholly owned subsidiary of Mulpha Group Services Sdn Bhd (MGS) which, in turn, is a wholly owned subsidiary of MIB. The proposed acquisition price is RM47.07 million cash.
As part of the deal, MLB has proposed to sell two parcels of land in Johor Baru to MIB’s wholly owned subsidiary, Leisure Farm Equestrian Sdn Bhd. The two parcels will be sold for a total of RM19.67 million.
Measuring 26,970 sq m (2.7ha), the first parcel has a price tag of RM14.92 million and has been designated for the development of apartments. Prior to the proposed land sale, MLB was in the process of conceptualising the development of 67 villas there with golf course frontage.
The second parcel, which covers an area of 5.172 sq m, is priced at RM4.75 million.
The deal also involves a proposed 3-for-2 bonus issue by MLB.
MLB said the proposed inter-company transactions are part of MIB’s strategy to streamline its property development projects in Malaysia. MIB, through Leisure Farm, will in future concentrate in the southern region, while MLB will concentrate in the central and northern regions of Peninsular Malaysia.
MLB said the land it is acquiring from MIB in Petaling Jaya is located within an important commercial area which has in recent years seen new commercial developments, such as such as the V Square @ PJ City Centre, The Plaza @ Jaya 33 and the redevelopment of the Jaya Shopping Centre.
“The PJ land is within close proximity to PJ’s new town centre and is easily accessible from major roads and highways. Given its strategic location and excellent accessibility, it is expected there would be commercial potential for the land and demand for the residential units to be developed there.
“In this regard, the proposed land acquisition is in line with MLB’s strategy to increase its landbank in strategic locations for future development to ensure earning growth sustainability.”
MIB, in its 2012 annual report, had noted that the PJ land will also contain a hotel besides the serviced residences. The development will feature approximately 200 serviced residences and 250 hotel rooms.
This article first appeared in The Edge Financial Daily, on July 31, 2013.
