KUALA LUMPUR (Apr 7): Malaysian Resources Corporation Bhd (MRCB) (
Financial Dashboard) is acquiring the German Embassy land here for RM259.16 million.
According to MRCB's (fundamental: 0.9; valuation: 0.9) filing with Bursa Malaysia today, the purchase of the 1.8661 acres (0.76 ha) freehold tract along Jalan Kia Peng would help MRCB grow its property development operations.
"The German Embassy land’s strategic location within the immediate vicinity of KLCC and its easy access and excellent transport infrastructure has made it a sought after address in Kuala Lumpur.
"The land is located close to numerous Grade-A office towers, 5-star hotels, the Suria KLCC shopping centre and other amenities. The acquisition of the German Embassy land is part of the Group’s strategy to seek good opportunities to expand its operations with its vision to create shareholder’s value by achieving strong and sustainable long-term growth," MRCB said.
The German Embassy tract's price at RM259.16 million or RM3,188 per square foot is about 6% higher than the market value of the land, based on the appraisal by CH Williams Talhar & Wong and Raine & Horne InternationalZaki & Partners, acccording to MRCB.
MRCB said it had today signed the sale and purchase agreement (SPA) with the Germany government. MRCB said it would finance the acquisition via bank borrowings and/or internally-generated funds.
MRCB said the SPA followed a tender by the German government on January 26 this year for the sale of the tract. MRCB said it expected to finalise the deal by August this year.
Today, MRCB group managing director Tan Sri Mohamad Salim Fateh Din said in a separate statement land prices would not pose a challenge to the company as the group was able to innovate with strategic planning and create value for its property projects.
"The supply of land is inelastic and the cost of land banking will continue to rise, but land banking is an ongoing process for all developers like MRCB because it is crucial for business growth.
"To address rising costs, we have continuously introduced new concepts, ideas and innovative features in our development whilst achieving better construction cost efficiencies and adopting new construction technologies," Mohamad Salim said.
At 12.30pm, MRCB shares rose two sen or 1.6% to settle at RM1.25 for a market capitalisation of RM2.23 billion.
The stock saw 377,100 shares done.