Sime Darby Property expands land bank

PETALING JAYA: Sime Darby Property Bhd has proposed to exercise a call option agreement by acquiring a parcel of 760.12 acres freehold land in Malaysia Vision Valley in Seremban, Negri Sembilan, for RM280mil, in a related-party transaction.

In a filing with Bursa Malaysia, the property group said its wholly owned subsidiary Sime Darby Property (MMV Central) Sdn Bhd yesterday entered into a sale and purchase agreement with Kumpulan Sime Darby Bhd (KSDB) for the proposed transaction.

KSDB is a wholly owned subsidiary of Sime Darby Bhd.

The transaction was part of the call option agreements between Sime Darby Property and KSDB as previously disclosed in a prospectus dated Nov 28, 2017, issued pursuant to its initial public offerings.

Sime Darby Property said the proposed land is located in Labu, Seremban, within the regional development of Malaysia Vision Valley 2.0 and adjacent to Bandar Enstek.

“The land is directly connected to the Nilai-Labu-Enstek Road, which is scheduled to be completed in 2023,” it said.

The acquisition would to be funded via a combination of internally generated funds and/or external bank borrowings, it added.

“The proposed acquisition is imperative for Sime Darby Property in securing strategic land bank for its development pipeline in the Malaysia Vision Valley.

“Taking into consideration the current industrial project surrounding the area and the anticipated completion of the Nilai-Labu-Enstek road, the said land will be strategically positioned to be turned into a holistic industrial development scheme,” it said.

Sime Darby Property said the proposed acquisition would not have a material effect on its earnings or net assets per share, share capital and substantial shareholders’ shareholding for the financial year ending Dec 31, 2021.

The effect of the proposed acquisition on the group’s gearing, however, would be dependent on the eventual funding mix to be used.

Sime Darby Property returned to the black with a net profit of RM19.9mil for the second quarter ended June 30, 2021, compared to a net loss of RM93mil in the corresponding quarter a year ago.

Revenue also saw a strong corresponding rise of 74.5% to RM502.8mil for the quarter in review from RM288.2mil in the corresponding quarter last year.

For the six months to June 2021, its net profit stood at RM80.5mil, compared with a net loss of RM90.3mil in the corresponding period a year ago, while revenue rose to RM1.09bil from RM764.96mil.

Sime Darby Property’s shares rose 3.5 sen to close at 73 sen yesterday.

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