KUALA LUMPUR (Jan 18): FM Global Logistics Holdings Bhd is buying two pieces of land totalling 5.68 acres in the Setia Alaman Industrial Park, Klang, from property developer Petaling Garden Sdn Bhd for RM37.86 million, cash, or RM153 per sq ft. 

Petaling Garden is a wholly owned subsidiary of I & P Group Sdn Bhd, which is in turn wholly owned by S P Setia Bhd.

In a filing with Bursa Malaysia on Thursday, the international freight services provider said its wholly-owned unit FM Global Logistics (M) Sdn Bhd has signed a sale and purchase agreement with Petaling Garden to buy a 2.84-acre piece of land in the area for RM18.93 million, marking its second acquisition after the one entered in December last year, where FM Global Logistics acquired a similar-sized piece of land from Petaling Garden in the same area also for RM18.93 million. That acquisition is still pending completion.

"The proposed land acquisitions are to facilitate the group’s future expansion of its third-party logistics (3PL) warehousing and distribution services. The purchase consideration is reasonable and reflects the current price of similar lands near the properties," it added.

FM Global Logistics noted that based on its internal assessment and enquiries on the offer prices of industrial lands located in the surrounding vicinity of the land, they range from RM210 to RM220 per sq ft, depending on the site, status and condition of the lands.

Additionally, it said the properties are strategically located in an established industrial area with good infrastructure and connectivity such as the NKVE-Setia Alam Link, New Klang Valley Expressway, New North Klang Straits Bypass and Federal Highway for ease of logistics.

"The properties are close to major seaports such as Northport and Westports in Port Klang, which provides an advantage for the group in view that the group is principally engaged in multimodal freight services. The properties are also strategically located in an established industrial area with good infrastructure and connectivity."

It plans to finance the proposed land acquisitions through internal funds and/or bank borrowings.

FM Global Logistics also said given that the properties are located in an area with good connectivity and amenities, the proposed land acquisitions are expected to contribute positively to the growth of the group when the properties are developed into warehousing and distribution services in the future.

The group currently operates a total warehouse space of 1.36 million sq ft in multiple countries including 285,000 sq ft in Singapore.

There will be another 200,000 sq ft of warehouse space coming onstream by June this year when the construction of a new warehouse in Port Klang is completed.

"The proposed land acquisitions will increase the group's warehouse space when they are developed, which will significantly strengthen its 3PL capabilities in Malaysia," said FM Global Logistics.

Barring any unforeseen circumstances, the proposed transactions are expected to be completed in 2026.

FM Global Logistics shares closed unchanged at 59.5 sen on Thursday, giving it a market capitalisation of RM332.27 million. The stock has risen 4.39% over the past one year, but is down 4.03% so far this year.