KUALA LUMPUR (Jan 8): OSK Holdings Bhd's indirect wholly-owned subsidiary Aspect Synergy Sdn Bhd plans to purchase six parcels of land in Negeri Sembilan for RM145 million to turn into a mixed development project with a gross development value (GDV) of RM3.6 billion.

In a filing with Bursa Malaysia today, OSK Holdings said the freehold agricultural lands measuring approximately 310.7 ha in Mukim Rantau, Seremban, are being purchased from Ambank (M) Bhd.

The proposed acquisition will enable OSK Holdings to increase its existing property development land bank and to strengthen its presence in the growing Seremban locale particularly since the town has been identified as one of the stops along the high-speed rail link between Singapore and Kuala Lumpur.

"The acquisition of [these] lands at relatively competitive pricing also enables the group to fulfill its corporate social responsibilities by providing a sizeable number of affordable landed housing to the general public," it said.

Adding that the proposed acquisition was part of its strategy to replenish its land bank for continuous development, the group said it targets to launch the first phase of development by the second quarter of 2017.

"Subject to obtaining approvals from the relevant authorities, the group intends to undertake an integrated residential and commercial development comprising mixed landed and high-rise residential and mixed commercial components.

"Based on preliminary plans, the proposed development is expected to have an estimated GDV of approximately RM3.6 billion," it said.

The purchase price was arrived at on a willing-buyer willing-seller basis after taking into consideration the valuation of the lands of RM168.5 million or approximately RM5.04 per square foot, carried out by professional valuer Messrs. Rahim & Co based on their valuation on Dec 2, 2015.

The acquisition, to be funded by a combination of internally generated funds (20%) and external borrowings (80%), is expected to be completed by the end of the second quarter of 2016.

Looking ahead, OSK Holdings said the outlook for the property market is expected to gradually improve due to support from these urbanisation factors.

"The management is confident of the prospects of the lands and is optimistic that the development will contribute positively to the earnings of the group in the near future and maintain its earnings momentum," it said.

Shares in OSK Holdings, a licensed moneylender providing equity or share financing and other investment related financing to retail and corporate clients, closed unchanged at RM1.63 for a market capitalisation of RM2.25 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)