Tropicana to sell Tropicana Gardens Mall to IOI Properties for RM680mil

The centre court of Tropicana Gardens Mall

KUALA LUMPUR: Tropicana Corp Bhd has signed a sale and purchase agreement (SPA) with IOI Mall Damansara Sdn Bhd (IOI MD) for the sale of Tropicana Gardens Mall for RM680mil.

In a statement, Tropicana said its indirect 70%-owned subsidiary, Tropicana Indah Sdn Bhd (TISB) signed the SPA with IOI MD, a wholly-owned subsidiary of IOI Properties Group Bhd (IOIPG) for the disposal.

Tropicana said the disposal will allow the company to monetise its investment property, with the sale proceeds substantially reducing debt, improving cash flow, and lowering interest expenses.

“This transaction aligns with the group's ongoing strategic initiatives to monetise its low-yielding landbanks and investment properties, providing the financial flexibility necessary to support future growth,” it said.

As a result of this disposal, the Tropicana’s pro forma gearing ratio is expected to decrease from 0.54 times (as of Dec 31, 2023) to 0.39 times.

In addition to TGM disposal, the group has also sold two other investment assets – W KL Hotel and Courtyard by Marriott Penang – to IOIPG for a total consideration of RM435mil.

“This year, the group reported a string of positive news, from its successful sukuk redemption, higher revenue jump to multiple award triumphs. We are confident that the Group will continue to strengthen its market presence and contribute to its future earnings supported by high unbilled sales of RM2.4bil and strong take-up for ongoing projects. This sale also marks Tropicana's efforts to maintain financial discipline and enhance our financial stability.

“With substantial strategic landbanks across Klang Valley, Johor, and Genting Highlands, Tropicana has the flexibility to reposition its asset and debt portfolios effectively,” Tropicana said.

Tropicana Gardens Mall, which opened its doors in 2020, is a 7-storey mall with direct access to Surian MRT Station and a net floor area of 1.05 million sq ft. Recently, it earned green building certification (GBI), demonstrating its commitment to ESG best practices.