KUALA LUMPUR (Nov 9): A wholly-owned subsidiary of Caely Holdings Bhd has proposed to acquire three parcels of freehold land in Penang for RM30.93 million for a residential and commercial project.

In a filing with Bursa Malaysia today, the group said Caely Development Sdn Bhd had entered into a conditional sale and purchase agreement with GTM Property Management Sdn Bhd, for the three parcels of land measuring about 21,106.89 sq m in total.

The women's undergarments manufacturer said the proposed acquisition augurs well for its strategy to expand and establish its footprint in other States “and would position the Group as an upcoming property developer in Penang”.

The management is of the view that demand for residential property in Penang is expected to remain favourable among local and foreign buyers.

Caely added that the acquisition is in line with the group’s overall strategy to acquire land bank for potential development in strategic locations with high development value, although it noted it was too preliminary to ascertain the exact product mix, total costs to complete the intended project, or estimated profits to be derived as the development plan is pending finalization.

Nevertheless, given the land’s strategic location and barring any unforeseen circumstances, the Board is confident that based on preliminary market study, the contemplated residential and commercial project, when launched would contribute positively to the group's earnings.

The purchase is expected to be funded via a combination of internally-generated funds and bank borrowings.

Barring any unforeseen circumstances, and subject to the fulfilment of the conditions precedent as set out in the agreement, the proposed land acquisition is expected to be completed by the first quarter of 2019.

Caely closed two sen down or 1.82% at RM1.08 today for a market capitalisation of RM87.49 million.