SunCity to acquire land parcels in Johor for RM134m

KUALA LUMPUR: In a bid to develop its first flagship project in Johor, Sunway City Bhd (SunCity) is acquiring parcels of land in the southern state measuring a total 2.81 million sq ft for a consideration of RM134.53 million, it announced to Bursa Malaysia on Tuesday, Dec 28.

The group, via its unit Asli Budimas Sdn Bhd (ABSB), had entered into a sale and purchase agreement (SPA) with vendor Bukit Lenang Development Sdn Bhd (BLD) on Tuesday to acquire the tracts.

SunCity aims to build an upscale, niche residential development on those parcels with an estimated gross development value (GDV) of RM932 million, it added.

The land is strategically located within the Iskandar Malaysia development region which is boosting property prices in the state, it said.

"In its quest for expansion, SunCity has determined Johor as one of its key state due to Johor's huge population and high economic growth.

"SunCity aims to replicate its success in the Johor market by consolidating its years of experience and expertise in building quality residential and commercial properties.

"Hence, with the improving economic sentiment and the strategic location of the Land, SunCity is confident that the take up rate will be strong once the project is launched," it said.

It noted that the parcels are also surrounded by other matured townships such as Taman Molek, Redang Villa, Taman Redang and Taman Johor Jaya, as well as Ponderosa Golf and Country Club of Johor Bahru, along Persisiran Bumi Hijau next to Laman Tasik Pandan Recreational Park.

The land is easily accesible via the Tebrau Highway and Kota Tinggi Highway, as well as other local main access roads such as Jalan Molek and Jalan Harmoni Utama. The development will also be well supported by surrounding amenities like schools, hypermarkets, shopping centre, banks, healthcare centres, etc," it said.

According to the group, the purchase price was arrived at on a willing buyer-willing seller basis. It iwll fund the purchase through a combination of bank borrowings and internally-generated funds.

Prior to entering the SPA, the group and BLD had jointly conducted a feasibility study.

"The preliminary feasibility study of the proposed acquisition features mixed residential (eg townhouse, bungalow, semi-detached and condominium) complemented by integrated and high quality amenities. Based on the results of the feasibility study, SunCity is of the view that the project is financially viable," it said.

The group noted that it will monitor market sentiment and launch the project when there is a strong demand for homes.

SunCity has also entered into a shareholders' agreement with Tunku Osman Ahmad and Goh Teong Hoe to regulate and restructure their relationship as shareholders of ABSB and in relation to the company's business and conduct.

Following the completion of the agreement, SunCity has proposed to restructure the shareholding of ABSB into the following: SunCity (80%); Tunku Osman (10%) and Goh (10%).