This article first appeared in The Edge Financial Daily on October 31, 2017

KUALA LUMPUR: Country View Bhd is buying a 163.92-acre (66.34ha) piece of land in Iskandar Puteri, Johor Baru from UEM Sunrise Bhd for RM310 million cash, which the Johor-based property developer intends to develop into a mixed-commercial development with a gross development value of RM1.26 billion.

The development will comprise resort-linked villas, shop offices and commercial plots of land, it said.

In a filing with Bursa Malaysia yesterday, Country View said its wholly-owned subsidiary Country View Resources Sdn Bhd has entered into a conditional sale and purchase agreement with Bandar Nusajaya Development Sdn Bhd — UEM Sunrise’s unit — for the proposed acquisition.

“Barring any unforeseen circumstances, the proposed disposal is expected to be completed in the third quarter of 2018,” UEM Sunrise said in a separate filing.

Country View executive director Law Kit Tat and his younger brother Law Kee Kong, who is the non-executive director, are major shareholders of the company with a combined 27.4% stake as at Feb 28, 2017.

Meanwhile, Country View said the proposed land acquisition represents a strategic purchase as the land is situated in Iskandar Puteri, which is in close proximity to Country View Resources’ existing ongoing development project of Taman Nusa Sentral and will allow Country View Resources to capitalise on its already established presence in Iskandar Puteri and Johor Baru,” it added.

Country View noted that the proposed development plan is expected to commence after all necessary approvals from the relevant authorities have been obtained, with completion of the entire development expected to take seven years.

“However, it is too preliminary to ascertain the total development cost, the expected commencement and completion dates, number of units in respect of each type of development, as well as the expected profits to be derived from the proposed development plan,” it said.

The site is currently used for workers’ accommodation and turf farming.

Country View said it intends to fund the proposed land purchase and development cost via a combination of internal funds, bank borrowings and/or issuance of debt securities.

“The planned development of the resort-linked villas will be a relatively new product with a fresh concept in Iskandar Puteri, which may be used for homestays and/or holiday homes. With their close proximity to Singapore via the Second Link Expressway, these resort-linked villas will be attractive to both locals and foreigners alike.

“The shop offices are expected to be launched after the resort-linked villas and due to the close proximity of the land with many existing developments to be completed over the next few years, the demand for commercial/retail/office space is expected to be on the rise in the Iskandar Puteri region.

“The commercial plots of land, meanwhile, will be reserved for future development,” it added.

UEM Sunrise shares closed up one sen or 0.9% at RM1.12, bringing it a market capitalisation of RM5.08 billion, while Country View shares ended the day two sen or 1.24% higher at RM1.63, valuing it at RM163 million.