Mah Sing acquires Johor land from S P Setia for RM157 mil

• Plans to develop a premium serviced apartment project, to be named as M Grand Minori, which will have a GDV of RM1.5 billion

KUALA LUMPUR (Dec 19): Property developer Mah Sing Group Bhd (KL:MAHSING) has acquired 5.99 acres of land in Taman Pelangi, Johor, from S P Setia Bhd (KL:SPSETIA) for RM156.8 million to develop a premium serviced apartment project.

Mah Sing's wholly owned subsidiary Dsara Sentral Sdn Bhd has signed a sale and purchase agreement with Pelangi Sdn Bhd, a subsidiary of S P Setia for the acquisition of two parcels of land for the proposed development, according to its filing with Bursa Malaysia on Thursday. 

Mah Sing said the premium serviced apartment, to be named as M Grand Minori, will have a gross development value (GDV) of RM1.5 billion. The land is located 3km from the upcoming Johor-Singapore Rapid Transit System (RTS) Link’s Bukit Chagar Station.

“The development is aimed at a diverse range of buyers, including first-time homeowners, upgraders from nearby established townships, Malaysians working in Singapore, Singaporeans, and other foreign buyers and registration of interest is expected to begin in the second quarter of 2025," Mah Sing said in a statement.

Mah Sing intends to fund the costs and expenses related to the proposed acquisition and the proposed development through a combination of internally generated funds and bank borrowings.

"The exact funding mix will be decided by the management at a later stage after taking into consideration the group’s gearing level, interest costs as well as internal cash requirements for its business operations," it added.

This marks Mah Sing’s sixth land acquisition in 2024, bringing the total GDV of all six acquisitions to RM5.8 billion. In Johor alone, Mah Sing acquired three parvcels of land that includes the 100.4 acres of land, named M Tiara 2 in April, followed by the December acquisition of 59.12 acres for M Tiara 3.

Mah Sing’s founder and group managing director Tan Sri Leong Hoy Kum said the group rationale for expanding in Johor came as it saw "strong demand for properties", fuelled by spillover interest from Singapore due to its proximity and relatively affordable property prices.

“Additionally, ongoing infrastructure projects, such as the RTS Link, and the government’s commitment to enhancing Johor's economy, create a promising environment for growth,” Leong said. 

“With our strong brand recognition in the region, we are confident that this is the right time to further expand our presence, as improved connectivity and a booming property market provide excellent development opportunities," he added.

In a separate filing, S P Setia said the land disposal will help the group to optimise and rebalance its land bank and move towards an asset-light structure and achieve an efficient capital structure.

Post-disposal, S P Setia still owns a substantial remaining undeveloped land bank of approximately 1,123 acres in the Southern Region, which is poised for further development in the next 10 years, it said. 

"The group’s primary focus is to develop its landbank in the Southern Region into industrial estates which will comprise upcoming eco-industrial parks, and township developments," it added. 

Shares in Mah Sing traded unchanged at RM1.77 during the market noon break on Thursday, valuing the company at RM4.53 billion. Year-to-date, the stock has surged over 115%.

Meanwhile, shares in S P Setia traded one sen or 0.74% higher at RM1.36, giving it a market capitalisationn of RM6.8 billion. The stock has appreciated over 70% so far this year.

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