S P Setia to unlock value with RM157 mil Johor land sale to Mah Sing

• Mah Sing stated that the land will be developed into a premium serviced apartment to be named M Grand Minori, which will have a gross development value (GDV) of RM1.5 billion.

SHAH ALAM (Dec 19): S P Setia through its indirect wholly-owned subsidiary, Pelangi Sdn Bhd – has entered into a conditional sale and purchase agreement with Dsara Sentral Sdn Bhd ,a wholly-owned subsidiary of Mah Sing Group Bhd – to dispose its 5.99-acre freehold, commercial parcel at Taman Pelangi in Mukim Plentong, Johor Bahru for a cash consideration of RM156.8 million.

According to a media release by S P Setia, the sale was undertaken via a competitive tender process. The proposed disposal is part of the S P Setia’s bid towards establishing an asset-light structure and achieving capital efficiency, while optimising and rebalancing its landbank.

It is expected to contribute positively to Setia’s profits, in which will be utilised for the repayment of borrowings, working capital and accelerating investments into strategic projects, stated S P Setia.

S P Setia will continue to have a remaining undeveloped landbank of 1,123.8 acres in the Southern Region, which is poised for further development in the next 10 years.

Meanwhile, Mah Sing stated that the land will be developed into a premium serviced apartment to be named M Grand Minori, which 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.

According to a report by theedgemalaysia.com, 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 parcels 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.

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