AME Elite sells land in Pulai to data centre operator for RM209.84 mil cash

• The lands are all located in I-TechValley within Phase 3 of the Southern Industrial and Logistics Clusters (SILC) in Iskandar Puteri.

KUALA LUMPUR (May 13): AME Elite Consortium Bhd (KL:AME) is selling 11 plots of freehold land measuring over 34.91 acres in Pulai, Johor Bahru, for RM209.84 million cash to Hong Kong-based data centre operator Digital Hyperspace Malaysia Sdn Bhd (DHM).

In a filing with Bursa Malaysia on Monday, the property developer said the plots of land are located in I-TechValley — a 170-acre industrial park at the Southern Industrial and Logistics Cluster (SILC).

DHM is a wholly owned subsidiary of Quantum DC (HK) Ltd, which primarily provides infrastructure for hosting and data processing services, AME Elite said.

AME Elite is selling the 11 plots of land through its wholly owned subsidiaries Pentagon Land Sdn Bhd and Greenhill SILC Sdn Bhd. This sale is subject to approvals from the Johor State Government Office and other relevant authorities if the relevant land registry requires a no-objection letter from the Economic Planning Unit.

The transaction valued the land at RM138 per sq ft on a “willing-buyer willing-seller” basis.

According to CBRE WTW Valuation & Advisory Sdn Bhd, the plots of land were sold at a slight premium to the market based on previous transactions in Pulai. It said the last transacted price in Pulai was between RM120 and RM138 per sq ft.

Over the last one month, there has been a sharp increase in land demand in Pulai, especially from data centre operators.

The latest one was Axis Real Estate Investment Trust (Axis REIT), which disposed of 26.96 acres of industrial land in Axis Steel Centre @ SILC, Johor for RM162 million to a data centre operator. It did not disclose the identity of the purchaser. The transaction valued the land at RM138 per sq ft.

AME Elite estimated the company would lock in gross proceeds of RM155.04 million from the land sale. The proceeds have been earmarked to fund development costs relating to i-TechValley, including land, infrastructure and construction, as well as future industrial property development and investment projects, including land acquisitions and joint ventures.

I-TechValley is AME Elite's latest ongoing industrial park development project with an estimated gross development value of RM1.5 billion spanning over five years.

Launched in October 2022, i-TechValley has achieved a take-up rate of approximately 30%.

Meanwhile, the remaining RM54.8 million will be used for working capital and related expenses for the proposed disposal.

The proposed sale is expected to be completed by the first quarter of 2025.

Trading of the securities in AME Elite has been suspended from 9am to 5pm on Monday and will resume on Tuesday. The counter was last traded at RM1.78, giving it a market value of RM1.14 billion. Its share price hit an all-time high of RM1.88 on Feb 9 this year.

AME Elite’s net profit for the third quarter ended Dec 31, 2023 (3QFY2024) surged 136% to RM21.92 million, from RM9.28 million a year earlier, mainly due to a fair value gain of RM13.12 million on investment properties, arising from the sale of industrial properties to AME Real Estate Investment Trust.

Revenue for 3QFY2024 grew 31.16% year-on-year to RM176.21 million from RM134.35 million.

For the nine months ended Dec 31, AME Elite’s net profit rose 9.55% to RM67.02 million from RM61.17 million on the back of a 51% surge in revenue to RM632.06 million from RM418.71 million.

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