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Saturday, September 14, 2013

Tropicana buying land in Johor for RM366mil


PETALING JAYA: Tropicana Corp Bhd is buying 18 pieces of freehold land in Pulai, Johor, at a cost of RM366.55mil for a yet unnamed mixed-use development, which is estimated to have a gross development value (GDV) of RM6.4bil.

It told the stock exchange that the sale and purchase agreement for the land, measuring 103.82ha, was signed yesterday between its unit Tropicana Desa Mentari Sdn Bhd and the vendor, Lee Pineapple Co Pte Ltd.

Tropicana, formerly known as Dijaya, said it was planning eco-themed retail and commercial projects on the land, which is currently approved for agricultural and industrial use.

The firm has yet to obtain a development order or determine the development costs and timelines.

Tropicana added that since no valuations were conducted on the land, its net book value was unavailable as it was not privy to the information. The price was agreed to on a willing buyer, willing seller basis, the company said.

The land is located in an area “ripe for mixed development”, being in Flagship B of Nusajaya north of Iskandar Malaysia, and ringed by established residential developments such as SP Setia Eco Gardens, Bukit Indah, Horizon Hill, Leisure Farm and Ledang Heights.

Other amenities and attractions in the vicinity include Legoland, Sanrio Hello Kitty Town, Pinewood Studios, Puteri Harbour, Kota Iskandar, Educity, Afiat Health Park and Southern Industrial and Logistics Cluster. The land is accessible via multiple access roads such the Second Link Highway, Pontian Highway, Pasir Gudang Highway and Coastal Highway.

Tropicana said the acquisition was in line with its expansion plans in Johor, bringing its total land-bank to 886ha with a potential GDV of RM79bil.

Funding is to be raised from bank debt and internal funds, the exact mix of which would be decided later. Its gearing levels are not expected to change until the third quarter of next year, pending the completion of the sale.

Tropicana has paid an earnest deposit of 1% of the purchase price to the seller, or RM3.67mil, and would settle the 10% deposit upon the execution of the sale and purchase agreement.

The balance RM329.9mil would be paid three months after all the conditions for the deal are fulfilled.

The land is free from all encumbrances save for several lease agreements with a brick manufacturer and a nursery. All existing structures on the land would be demolished, Tropicana said.

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