KUALA LUMPUR: Nestcon Bhd
plans to acquire three freehold land parcels in Iskandar Puteri, Johor, for RM95mil and diversify into property development, marking its first venture into the sector.
In a filing with Bursa Malaysia, the construction group said its indirect 70%-owned subsidiary, Nestcon Iskandar Puteri Sdn Bhd, had entered into a conditional sale and purchase agreement with KLG Iskandar Puteri Sdn Bhd to acquire the land.
The three plots have a combined land area of about 33,782 sq m and are located along Jalan Persiaran Afiat, Taman Kesihatan Afiat, Johor Baru.
Upon completion of the acquisition, Nestcon plans to undertake a mixed commercial and residential development on the site, comprising serviced apartments and retail units.
The proposed development will be carried out in two phases, with a combined gross development value (GDV) of RM1.37bil and an estimated gross development cost of RM1.03bil.
Phase 1 is expected to comprise about 1,231 serviced apartment units and 12 retail units, with a GDV of RM650.95mil.
Phase 2 will have about 1,324 serviced apartment units and 12 retail units, with a gross development value of RM720.1mil.
Nestcon said the development project is expected to generate an estimated gross development profit of RM336.97mil.
The group said the land acquisition would be funded through a combination of internally generated funds and bank borrowings, while funding for the development cost would also be determined at a later stage.
Nestcon said that while its building and infrastructure segment remains its main revenue driver, venturing into property development could provide a new and complementary source of income.
It added that the move may also allow it to tap synergies with its existing construction business, including the sharing of manpower, machinery, equipment and technical expertise.
The proposals are subject to shareholders’ approval at an extraordinary general meeting and any other relevant approvals.
Barring unforeseen circumstances, Nestcon expects the proposed diversification to take effect immediately upon shareholders’ approval, while the land acquisition is expected to be completed in the second half of 2026.
