DRB-Hicom’s Melaka land deal in line with its plan to build and sell industrial properties

DRB-Hicom Bhd’s proposed land acquisition in Melaka is in line with its strategic direction to focus on the development and sale of industrial properties, following its decision to exit the non-industrial property asset and hospitality portfolio in 2018, says CGS-CIMB.

The research firm said the land acquisition will expand the group’s industrial land bank asset portfolio.

DRB-Hicom is buying 116.44 hectares of plantation land for RM240 million in Alor Gajah from Tradewinds Plantation Bhd (TWPB), controlled by its major shareholder Tan Sri Syed Mokhtar Albukhary, for industrial park development.

The deal involves nine parcels of freehold land and one parcel of leasehold land, to be acquired from TWPB’s wholly-owned unit, Eksklusif Persona Sdn Bhd (EPSB).

The overall 10 parcels have been approved for industrial use.

CGS-CIMB said in a note today that DRB-Hicom plans to start the development of the lands in 2022.

“It also plans to obtain potential recurring income by entering into an agreement with TWPB to rent the land to the latter as the parcels are currently part of a larger oil palm plantation TWPB manages,” it said.

AmInvestmentment Bank said the RM240 million land acquisition is ‘reasonable’ compared with two recent transactions by Apex Healthcare Bhd and Malakoff Corp Bhd.

Apex and Malakoff acquired 18.8 acres and 176.5 acres for RM20.4 million and RM150 million, translating to RM1.08 million and RM850,000 per acre respectively.

DRB-Hicom’s purchase comes to about RM830,000 per acre, the research house said.

Presently in Melaka DRB-Hicom is involved in Hicom Pegoh Park, a premier quality integrated industrial development supported with residential and commercial components.

Source: NST