iProperty, 8 May 2014 - Tropicana Sells Kuala Lumpur City Centre Land for RM448 million
iProperty, 8 May 2014
*Sells Jalan Bukit Bintang land in KL City Centre for RM448.4 million or RM3,280 psf
*To book in an estimated net gain of RM145 million
*To partner HK-‐listed Agile Property Holdings Ltd to develop said land on a 30:70 basis
*Group remains steadfast in its transformation strategy to further unlock sizeable landbank value through development and land sale opportunities
Petaling Jaya: Property developer Tropicana Corporation Berhad (“Tropicana” or “Group”) announced the sale of approximately 3.138 acres prime freehold land located along Jalan Bukit Bintang in Kuala Lumpur to Offshore Triangle Sdn Bhd (“JV Company”) for a total cash consideration of RM448.4 million or RM3,280 per square foot.
Targeted for completion in the first half of 2015, this transaction is expected to generate an estimated net gain of RM145 million for Tropicana, translating to an incremental net earnings per share of 11 sen.
The JV Company is an alliance between Tropicana and Agile Property Holdings Ltd (“Agile Property”), a leading property developer in China with Agile Property having 70% equity stake in the joint venture, and Tropicana the remaining 30%. The proposed land acquisition is earmarked for a mixed commercial development.
At the signing ceremony today between the two parties, YBhg Tan Sri Dato’ Danny Tan Chee Sing, Group Executive Vice Chairman of Tropicana said, “This is a meaningful transaction and milestone for Tropicana as it crystallises the value of our Jalan Bukit Bintang landbank at a significant value, and also paves the way for a strategic tie-‐up at the project level with a highly reputable partner in Agile Property. We are extremely happy with this collaboration, and truly believe that this partnership will be a great success as both parties share the same philosophy and DNA in terms of how we approach our developments.
“Tropicana will continue to enjoy the future upside from this strategic landbank within the heart of Kuala Lumpur. Together, we look forward to introducing cutting-‐edge designs and new and innovative concepts to the marketplace. The strategic partnership with Agile Property will elevate Tropicana’s brand presence and visibility across regional markets including Hong Kong, Macau and China, and enable us to leverage on Agile Property’s marketing network in those markets.” he added.
Agile Property is a leading property developer in China and is principally engaged in the development of large-‐scale comprehensive property projects, with extensive presence in the businesses of hotel operations, property investment and property management. The Group currently owns a diversified portfolio in over 40 cities and districts and has a land bank with a total GFA of over 40 million square metres. The shares of Agile Property have been listed on the Main Board of Hong Kong Stock Exchange since 2005.
This sale and the joint development agreement underscore Tropicana’s transformation strategy in unlocking the significant value of its landbank through development as well as disposal opportunities and forming strategic alliances to accelerate growth. Land sale transactions undertaken by the Group over recent months, including this transaction, will raise gross proceeds of about RM1.1 billion. This is in line with our focus to de-‐gear and strengthen our group balance sheet.
With current undeveloped landbank of 1,954 acres with potential new GDV of more than RM70 billion across high growth areas in Greater KL, Iskandar Malaysia and Penang Island, Tropicana is well positioned on its transformation journey to becoming a premier property developer in Malaysia.