KUALA LUMPUR (July 3): Mah Sing Group Bhd said today that it plans to develop an integrated development in Batu 2.5, Jalan Cheras here, which will have an estimated gross development value (GDV) of RM2.2 billion.

It is also planning to build a business park with an estimated GDV of RM150 million on a 10.89-acre piece of freehold land in Bukit Mertajam, Penang.

In a statement today, Mah Sing also announced the vendor of the 85.43-acre of land in Sultan Salahuddin Abdul Aziz Shah Golf Course in Shah Alam, Selangor has mutually agreed to terminate the sales and purchase agreement as the land conversion approval and consent to transfer were not fulfilled.

In March 2014, the property developer had announced its plan to buy the portion of land for RM327.48 million or RM88 per sq ft from Great Doctrine (M) Sdn Bhd, which it had intended to turn the land into a residential development with a GDV of RM2.5 billion.

"This termination will allow Mah Sing to focus on affordably-priced products in other developments, rather than high end products," the group said.

Meanwhile, Mah Sing said it has signed an agreement to acquire Cordova Land Sdn Bhd, which has an offer accepted by Kuala Lumpur City Hall (DBKL) to purchase the 11.233 acres of prime land in Batu 2.5, Jalan Cheras.

The land is located opposite Courts Mammoth along Batu 2.5 Jalan Cheras here and 1.8km from the Sunway Velocity Mall, it added. It currently houses a surau, Kompleks Belia Bandaraya and the Stadium Badminton Kuala Lumpur, which will be reconstructed as part of Cordova’s corporate social responsibility.

"The total consideration of up to RM263.48 million or RM538 per sq ft after taking into consideration the share sales, land cost and estimated reconstruction and upgrading cost estimated at RM25 million allocated for Stadium Badminton Kuala Lumpur, is at a discount from the indicative market value of the surrounding lands, as per an indicative valuation by independent valuation company Rahim & Co for the land at RM333.18 million or RM680 per sq ft," Mah Sing said.

PricewaterhouseCoopers has also been appointed to conduct due diligence on Cordova. Under the share sale agreement, the payment for the shares in Cordova will be paid over a maximum duration of 21.5 months, subject to completion of the vendor’s obligations.

Dubbed M Vertica, Mah Sing said the integrated development is targeted at first-time home buyers and some upgraders, due to its value proposition of quality products at affordable indicative pricing from RM450,000.

“The prime KL city location coupled with the affordable entry level pricing provides an unbeatable value proposition. We are looking at residential suites from 850 sq ft at an indicative price from RM450,000 or RM529 per sq ft and a choice of bigger units at 1,000 sq ft," Mah Sing group managing director Tan Sri Leong Hoy Kum said in the statement.

"To optimise the potential of the location, M Vertica encompasses retail shops and competitively priced residential suites, and is planned as the tallest residential towers in Cheras. The development is planned to be [an] affordably-priced urban luxury, with flexible layouts from 3- to 4-bedroom units," he added.

M Vertica will also feature a clubhouse, with facilities such as swimming pool, gym and a landscape area.

On the proposed business park, Mah Sing said it has acquired a 10.89-acre of freehold land in Bukit Mertajam for RM43.8 million, which is located along the south-western side of Jalan Permatang Tinggi.

"According to a valuation report by PPC International Penang Sdn Bhd, the market value of the Bukit Mertajam land is RM45.31 million," it noted.

The proposed development will offer well-conceptualised multi-functional industrial spaces, comprising a mix of shop offices and light industrial factories.

Mah Sing said the land, with development order obtained and earthworks done, is ready for immediate development which fits in well with the quick turnaround model of the group. However, the group plans to submit revised development plans to the relevant authorities for approval to vary certain components of the development order to maximise the development potential of the land.

Mah Sing also announced it has sold its 51% equity interest in Convention City Development Sdn Bhd to Diverse Capital Sdn Bhd (DCSB) for RM6.557 million. The stake was acquired back in May 27, 2013 for RM1.632 million, as Convention City has the development agreement to develop 8.33acres of land next to Sabah International Convention Centre in Kota Kinabalu, Sabah.

"However, since the execution of the development agreement in 2013, the landowners’ obligations which include registration of land title with condition for commercial development, settlement of conversion premiums and delivery of vacant possessions, have yet to be completely fulfilled," it explained.

The group had planned to develop a waterfront integrated project dubbed Kota Kinabalu Convention City with a GDV of RM1.4 billlion, on the site.

Leong said the group will continue to streamline its portfolio of landbanks to fit its business strategies and match current market demand.

"With the new acquisitions, currently Klang Valley yields approximately 67% of our remaining GDV and unbilled sales, and we target to increase it to 75% within the next two to three years.

"To match market demand, we will choose lands that can be developed into quality homes, with affordable pricing," he added.

Leong added Mah Sing is focused on acquiring more lands in the Klang Valley and Greater Kuala Lumpur, as this region has proven to have the most resilient property demand in the country, due to population and economic growth.

"Having aligned our portfolio and in line with our business strategy, we target to preview both M Vertica in Cheras and the business park in Batu Mertajam in the third quarter of 2017,” he said.

Including the two new acquisitions, Mah Sing's combined potential GDV and unbilled sales stands at RM30 billion, which can support eight years of revenue growth.

At 4.37pm, Mah Sing shares were down four sen or 2.47% at RM1.58, with 728,300 shares done, for a market capitalisation of RM3.8 billion.