Boon Koon Group seeks to diversify into property

PETALING JAYA: Commercial vehicle manufacturer and trader Boon Koon Group Bhd plans to diversify into the property business by participating in a commercial development in Petaling Jaya with a gross development value (GDV) of RM306.1mil.

In a filing with Bursa Malaysia, the company said its unit BKG Development Sdn Bhd had inked a joint development agreement to build some serviced apartments and retail lots with Aera Property Group Sdn Bhd (formerly known as Asthetik Property Group Sdn Bhd).

The development will comprise two blocks of 29 storeys each with a total of 752 units of service apartments, a podium block comprising 13 retail units of shoplots, a basement carpark and eight storey carpark on a piece of leasehold land.

The development, Aera Serviced Residence, will see Aera Property through its unit Platinum Eminent Sdn Bhd facilitating the implementation and completion of the project in its capacity as the developer while Boon Koon will implement and complete the development project, the company said in its announcement.

Boon Koon is required to pay Platinum Eminent an upfront participation fees of RM20mil and in return, it will be effectively entitled to 60% of the gross development profits of the project estimated at RM93.5mil.

The profits are calculated based on a GDV that is estimated at RM306.1mil and a gross development cost of some RM212.6mil.

The project is expected to be completed in March 2021.

The company also announced it would be raising funds to fund its participation fees and for future property development projects.

It will issue up to 55.35 million new shares in the company to independent third party investors that will be identified, at an issue price to be determined at a later date.

“Based on an indicative issue price of 40 sen per special issue share, the proposed special issue of shares is expected to raise up to approximately RM22.14mil,” it said.