PETALING JAYA: Sime Darby Property Bhd’s (SDP) acquisition of 948 acres of land in Selangor is expected to bode well for the company’s efforts to diversify its business into the industrial and logistics segment.
TA Research in a report said it is not surprised by SDP’s acquisition of the land.
“We deem the acquisition cost of RM16.9 per sq ft reasonable, given the current asking price of freehold agriculture land in Kapar, Klang, ranging between RM10 per sq ft to RM70 per sq ft.”
The research house noted that funding the acquisition is not an issue, given that the group’s latest net gearing level is healthy at 28.2% with a cash balance of RM876mil.
“We estimate it has a further RM2bil in debt headroom for working capital and land acquisition before exceeding management’s self-imposed net gearing cap of 50%.”
Overall, TA Research said it is encouraged by the group’s ongoing efforts to diversify its business and further strengthen its industrial and logistic development division.