PETALING JAYA: Conglomerate Sunway Bhd is boosting its land bank close to its flagship development Sunway township by buying 17 acres worth RM286mil.
The parcel, which is situated next to Western Digital in the Sungei Way Free Trade Zone, works out to about RM386 per square foot.
It is believed to have belonged to a politician who used to be active in the 1980s in Selangor and his partner.
With the acquisition, the company plans to roll out a mixed project that entails service apartments and retail shops, with a total gross development value of RM1.8bil.
Sunway said the purchase from a private company, Kelana Resort Sdn Bhd, was in line with its target to buy land ready for immediate launch. It expects the first launch of the project to be in the financial year ending Dec 31, 2016, with a development period of five years.
Sunway said the residential units would be designed to capture the view of the 18-hole golf course of Kelab Golf Negara Subang and a 15-acre water retention pond.
It planned to improve the pond’s landscape by working with local authorities.
“In addition, the land is located about 600m from the Setia Jaya KTM and Bus Rapid Transit Sunway Line stations which provide residents access to public transportation networks to Kuala Lumpur City Centre, Subang Jaya, Sunway Resort City, Shah Alam and Klang,” it said.
The Lebuhraya Damansara-Puchong is on the northern boundary of the land.
Much of the 17 acres is leasehold while 0.2 acre is freehold.
The land was purchased through an open tender. It took into consideration the development potential of the land, which met its required internal rate of return.
“Given Sunway’s knowledge of the market value of the surrounding properties and the potential development value of similar land within the vicinity, i.e. Kelana Jaya, no valuation was carried out on the land,” it added.
It will buy the land through bank borrowings and/or internally generated funds and expected the acquisition to be completed by the second half of the year.
Sunway’s net gearing stood at 0.3 times as at end-December 2014.
“Properties in Petaling Jaya are welcomed due to scarcity of land and continuous population growth. Petaling Jaya, being one of the most developed areas in terms of population and economy, has long been an area of focus by Sunway.
“Sunway is confident that the project will receive positive response when it is launched,” the company said.
It had conducted a feasibility study before bidding for the land while it also studied surrounding projects to assess the viability of the project.
Paradigm at Kelana Jaya consists of a shopping mall, corporate offices, serviced residences and hotel suites.
Meanwhile, Icon City, located at SS8, Petaling Jaya, comprises serviced apartments, retail shops, mall, offices and hotel on a 20 acres.
Sunway closed 1 sen lower to RM3.40 with a market cap of RM5.94bil.