KUALA LUMPUR: Property developer Yong Tai Bhd is planning two new developments with an estimated gross development value (GDV) of RM2.3 billion in Melaka, to complement its Impression City master development.

It said yesterday it is buying two pieces of leasehold commercial land measuring 12 acres (4.9ha) in all, next to the Impression Melaka theatre, for a RM1.1 billion mixed development comprising a hotel, serviced apartments and retail units.

Yong Tai is buying the two pieces of land by acquiring the owner Laila Development Sdn Bhd for RM35 million. It intends to fund the purchase via internal funds and bank borrowings.

In a statement, Yong Tai said the project’s gross development cost (GDC) is RM800 million inclusive of the land cost, which gives rise to a potential development profit of RM300 million.

Yong Tai expects the mixed development to take approximately five years to complete. Now in the initial stages of development planning, it will submit a detailed development plan to the relevant authorities for approval.

“We deem these acquisitions as strategic investments and expect them to contribute positively to the group’s future earnings in the years to come,” said Yong Tai group chief executive officer Datuk Wira Boo Kuang Loon. The acquisition is expected to be completed by the third quarter of 2017.

Meanwhile, Yong Tai’s wholly-owned subsidiary, YTB Impression Sdn Bhd, is partnering JM Bestari Land Sdn Bhd to develop a piece of land in Melaka Tengah, Melaka. JM Bestari is in the midst of buying the land from the Chief Minister of Malacca (Inc).

Under a joint development agreement with JM Bestari, YTB Impression will be granted the sole and exclusive rights and entitlement to develop the land.

In return, YTB Impression will pay JM Bestari an amount equivalent to 21% of the GDV of the joint-venture (JV) development, which is also expected to take five years to complete and may include commercial and retail units.

The proposed JV development is expected to have a total GDV of approximately RM1.2 billion and an estimated GDC of RM800 million, giving rise to a potential gross development profit of RM400 million, said Yong Tai.

With an estimated GDV of approximately RM2.3 billion, Boo said both corporate exercises will pave the way for the group to continue tapping into the property development industry in Malaysia.

The projects are expected to increase Yong Tai’s development land banks in Impression City from 117 acres — inclusive of the 17-acre Impression Melaka theatre — to 138 acres, the group added.