Land & General Bhd (L&G) plans to construct serviced apartments in Selangor's main commercial district of Bandar Puchong Jaya.
It is acquiring 1.44 hectares of leasehold commercial land in Pekan Desa Puchong to develop low-cost serviced apartments for the bottom 40 per cent (B40) and middle 40 per cent (M40) income groups.
L&G said in a filing with Bursa Malaysia yesterday that its indirect wholly-owned subsidiary, Billion Megastar Sdn Bhd, had signed a conditional agreement to buy the land from Hartanah Idaman (M) Sdn Bhd.
The leasehold land has remaining 75 years expiring May 4, 2096. Billion Megastar will pay RM68.04 million or RM440 per square feet.
Bandar Puchong Jaya is a township in the vicinity of Bandar Sunway and Bandar Kinrara.
According to L&G, the proposed acquisition would provide it with a strategically located parcel of land that is within walking distance of the IOI Puchong Jaya LRT station and the IOI Shopping Mall.
Other notable landmarks in the vicinity include AEON BIG Puchong Utama, Tesco Extra Bukit Puchong, Sports Arena @ Puchong and IOI Business Park.
L&G stated that the land has a high earning potential due to the type of units that will be developed in the area and the expected selling prices for the apartments.
The group believes that the unit prices should be appealing to first-time homebuyers, even in the present challenging property market.
According to the filing, no development order has been obtained.
L&G said the purchase price would be paid for with cash and/or external borrowings.
The deal is expected to close by the end of the year.
The group stated that, barring any unforeseen circumstances, the acquisition would have no immediate material impact on its net assets (NA) for the fiscal year ending March 31, 2022.
The transaction is expected to boost the L&G group's NA by contributing earnings in future fiscal years as the property is developed and sold gradually.