The Edge, 8 May 2014 - Tropicana to sell Jalan Ampang land?

The Edge, 8 May 2014

KUALA LUMPUR: Tropicana Corp Bhd, whose trading was suspended yesterday pending a material announcement, is tipped to sign the sale and purchase agreement for a prime piece of land on Jalan Ampang, formerly where the historical Bok House was located, today.

Talk is that the property developer is selling its beleaguered 1.28-acre (0.5 ha) development, which is being developed into a 55-storey W Hotels and Residences, here.

The project, which has a gross development value in excess of RM1 billion, was first announced three years ago in April 2011 and the expected completion date was scheduled for 2016.

Sources told The Edge Financial Daily that the project completion may be pushed back by about 17 months to March 2017 as a result of handing out the contracts later than expected.

Currently, the site houses the project’s completed basement levels.

Based on the per sq ft price (psf) range of between RM3,300 and RM3,500, the sale of the land on Jalan Ampang could fetch between RM228.26 million and RM242.1 million.

Tropicana (then known as Dijaya Corp Bhd) had acquired the parcel of land for RM123 million, or RM2,200 psf, in July 2008.

Apart from this land, Tropicana also owns other plots of land within the Kuala Lumpur’s Golden Triangle.

Tropicana owns eight pieces of land totalling 3.26 acres, located along Jalan Bukit Bintang. There are also two other lots located on the corner of Jalan Sultan Ismail and Jalan Raja Chulan, purchased by Dijaya’s subsidiary, Ace Rhythm Sdn Bhd in October 2011, for a total of RM65.25 million.

According to Ho Chin Soon Research’s ownership and transaction 2013 series, the group had bought the eight pieces of land along Jalan Bukit Bintang for a total of RM175 million, or RM1,232 psf.

If the same price range of between RM3,300 psf and RM3,500 psf is to be assumed, the sale of those parcels of land could fetch between RM468.61 million and RM497.02 million.

Shares in Tropicana closed up three sen or 1.92 % at RM1.59 before the suspension of trading, giving it a market capitalisation of RM2.17 billion.