KUALA LUMPUR (June 4): AEON Co (M) Bhd (KL:AEON) is buying two pieces of land in Seremban, Negeri Sembilan for RM102.89 million to build a shopping mall.

The department store and shopping mall operator signed a sale and purchase agreement with Real Attraction Sdn Bhd on Tuesday to acquire the said parcels of land measuring 23.045 acres in Bandar Seremban Utama.

According to AEON’s filing with Bursa Malaysia, the proposed acquisition is in line with its corporate strategy to develop its future retail business and provides the group with the opportunity to expand in Seremban.

“The [parcels of] land are strategically located, immediately adjacent to the existing AEON Mall Seremban 2, which will enable AEON to construct a building-commercial shopping centre link to the existing AEON Mall Seremban 2 as one of the strategic expansion plans,” it said. 

The market value of the land as assessed by Oregeon Property Consultancy Sdn Bhd is RM110 million, said AEON. 

The deal was concluded on a "willing buyer, willing seller" basis” after taking into account the potential development of the parcels of land and the range of market values for similar land in the vicinity, it said. 

AEON said that 10% of the purchase price, which will be paid upon signing of the SPA, will be funded by internally generated funds. The remainder of the purchase price is expected to be funded through a combination of internally generated funds or bank borrowings.

The exercise, which is expected to be completed within 18 months from the date of the SPA, is subject to the approval of the state authority, the relevant authorities, the Economic Planning Unit of the Prime Minister’s Department and the Distributive Trade Committee approval from the Ministry of Domestic Trade and Consumer Affairs, if applicable. 

As of end-March, AEON had a short-term loan of RM30.5 million and a long-term loan of RM370 million, while cash and cash equivalents amounted to RM250.6 million.

At Tuesday’s closing bell, shares of AEON were up two sen or 1.42% at RM1.43, giving the group a market value of RM2.01 billion. The counter has climbed 30% year-to-date.