KUALA LUMPUR (Oct 1): BCB Bhd is buying the rights of the lease of a freehold tract measuring 22 acres in Medini Iskandar Malaysia, Johor, for RM58.5 million or RM40 per sq ft, to develop shoplots worth an estimated RM400 million in gross development value.

Based on preliminary plans, the project comprises 175 units of 3/5 shoplots, according to BCB’s filing on Bursa Malaysia today.

The Johor Bahru based property developer said the proposed project is expected to take four years to complete.

BCB’s wholly owned subsidiary Absolute 88 Sdn Bhd entered into a lease purchase agreement with Metrogold Assets Sdn Bhd, who holds the lease that is expiring on Feb 13, 2017, to effect the acquisition today. 

The land’s registered proprietor is Iskandar Investment Bhd.

BCB intends to finance the lease purchase through a internally generated funds and/or bank borrowings. Barring any unforeseen circumstances, BCB expects to compolete the acquisition by the fourth quarter of 2015.

The purchase price was arrived at after taking into consideration, among others, that the land is zoned for commercial use and that there is currently a strong demand for shoplots in the Medini Iskandar area.

“The proposed acquisition will serve as an opportunity for the group to tap into the economic zone of Iskandar Malaysia, which is set to become the most developed region in Southern Peninsular Malaysia,” said BCB.

BCB shares were not traded today. It was last traded yesterday at RM1.10, with a market capitalisation of RM220.25 million.

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