WCT buys land in OUG for RM450m

KUALA LUMPUR (Mar 15): WCT Bhd will pay a cash consideration of RM450 million to acquire the entire equity interest in Timor Barat Properties Sdn Bhd, which has three parcels of land totalling 23ha in the matured Overseas Union Garden (OUG) area of Kuala Lumpur.

The construction and property development firm said Iris Green Sdn Bhd, a wholly-owned subsidiary, had entered into a conditional share sale agreement to acquire Timor Barat from Eng Lian Enterprise Sdn Bhd, Shen & Sons Sdn Bhd and AMC Sdn Bhd.

The land, situated in Taman Yarl, off Old Klang Road, will be used for a mixed development project.

"As the land is situated in a mature residential area, WCT is confident of the prospects and is optimistic any development will contribute positively to the earnings of the group in the future," said WCT.

"The proposed acquisition enables WCT to gain ownership of the land in order to increase its landbank to further establish its position in property development," it added.

The price comes to an average of RM180 per sq ft, based on RM450 million and land area of 2.5 million sq ft.

WCT said the valuations are based on appraisals conducted by an independent valuer. The company will fund the acquisition via internally generated funds or borrowings, the proportions of which will be determined after considering its gearing level, interest expenses and the requirement for working capital.

The company said Timor Barat has also applied to obtain a contiguous piece of land in the area, which if approved, will be acquired by WCT for an additional consideration of RM150 per sq ft (freehold) or RM135 per sq f (leasehold). The size of the piece of land was not disclosed.

As at December 2011, WCT had RM803.9 million in cash or cash equivalents, and RM1.38 billion in borrowings.

The acquisition marks the company's single biggest development outside Klang where most of its projects are focused.

The company began with a township development in Bandar Bukit Tinggi 1, Klang in 1998. It has now expanded to include Bandar Bukit Tinggi 2 and Bandar Parklands — Bukit Tinggi 3, spanning a total of 545ha.

Outside Klang, WCT is undertaking a mixed commercial development, The Paradigm, in Petaling Jaya, as well as residential projects in Kota Kinabalu, Sabah, and Iskandar Malaysia, in Johor.

WCT's construction business has an order book of RM2.7 billion, 40% of which consists of projects for the Qatari government administrative office.

It is targeting to launch projects worth a total gross development value of RM1 billion this year, comprising luxury homes in Bandar Parklands, serviced apartments in The Paradigm and the second phase of a project in the Iskandar region.