The Star, 6 September 2011 - Dijaya in RM228 million land deal

The Star, 6 September 2011

Purchase of freehold land from Taiyo to cater for increasing demand for property in Kajang

PETALING JAYA: Dijaya Corp Bhd has entered into a conditional sale and purchase agreement with Taiyo Resort (KL) Bhd to acquire five parcels of freehold land in Mukim Semenyih Ulu Langat, Selangor, measuring approximately 80.33ha for RM228mil cash.

In a filing with Bursa Malaysia yesterday, Dijaya said the agreement with Taiyo Resort was entered by its wholly owned subsidiary Tropicana City Service Suites Sdn Bhd (TCSS).

The parcels of land are currently held under the operations of Kajang Hill Golf Club, it added.

Dijaya said the land would be transformed into a mixed development consisting of landed houses, condominiums, apartments and shop offices with an expected gross development value of about RM2bil.

"The development, known as Tropicana Kajang, will be another future revenue generator for the group and shall contribute positively to its financial performance," it said in a separate statement.

Dijaya said the freehold land had an upside potential in terms of capital appreciation because of the increasing demand for residential and commercial properties in Kajang, as seen in other developments such as Nadayu 92, Tiara Residence, Ramal Villa, Twin Palm and

Jade Hills, just to name a few.

"With increasing population and expanding residential properties in and around Kajang, the proposed development of commercial properties will cater to the rising demand for office and retail spaces.

"Furthermore the proposed Kajang-Sungai Buloh MY Rapid Transit project will enhance the investment potential of Kajang, presenting a greater opportunity to property investors," it said.

Group chief executive officer Tan Sri Danny Tan Chee Sing said the group was continuously acquiring sizeable land-banks with good development potential in strategic locations.

"The land deal provides an opportunity for the group to introduce more development in Kajang with quality and prestige synonymous with our Tropicana brand," he said.

Dijaya said the purchase price was arrived at a willing-buyer, willing seller basis after several considerations including the reasonably low land cost of RM26.36 per sq ft which will enable TCSS to price its proposed development competitively and with reasonable margins.

On the financing for the purchase, Dijaya said it would be funded through internal funds and/or bank borrowings.

"The exact mix of internally generated fund and bank borrowings will be determined by the management at a later date, after taking into consideration , Dijaya Corp and its subsidiaries' gearing level, interest costs and internal cash requirements for its business operations," it

said.

The group's net gearing is expected to rise to 0.22 times post-land acquisition assuming about RM114mil, representing approximately 50% of the purchase price, is financed via borrowings. As at Dec 31, 2010, Dijaya was in a net cash position.

Tan: 'The land deal provides an opportunity for the group to introduce ore development in Kajang.'