KUALA LUMPUR (Feb 4): Selangor Properties Bhd (Selangor Prop) has acquired four parcels of land, measuring a total of 5,253 sq m in Kuala Lumpur for RM32.2 million to develop high-end properties.
The group told the bourse that it yesterday entered into a sale and purchase agreement with Chong Khoon Lin Sdn Bhd to acquire the four adjoining parcels of freehold land with internally generated funds.
The purchase price was arrived at after taking into consideration the indicative market value of the land of RM33.9 million, as appraised by VPC Alliance (KL) Sdn Bhd, and was based on a lower value derived from the average selling price of RM600 per sq ft (psf) as compared with three identified transactions within the area with less strategic location but higher average selling prices, ranging from RM638 to RM680psf.
The land is adjoining and contiguous with the group’s existing land, measuring 4.91 acres (1.99ha), in Jalan Batai, Damansara Heights. It was acquired in 1980 and had been earmarked for residential development.
The group said the plan will enable it to have an amalgamated or enlarged parcel of land, which affords better land use and better planning development.
Based on a preliminary plan, the proposed development on the land, together with the company’s existing land, will comprise 124 units of high-end stratified villa, with 446 units of basement car park, which will complement the company’s high-end condominium development project across that area.
“However, it is too preliminary to ascertain the commencement date, total development cost and the expected profit to be derived from the proposed development. The development project is expected to be developed over a span of four years,” it said.
The acquisition will not have any material effect on the group’s net asset per share, gearing and earnings per share for the financial year ending Oct 31, 2016, as the proposed development is expected to start only from 2018 to 2020.
Selangor Prop rose one sen or 0.19% to close at RM5.38 yesterday, giving it a market capitalisation of RM1.85 billion.
This article first appeared in The Edge Financial Daily, on Feb 4, 2016. Subscribe to The Edge Financial Daily here.