KUALA LUMPUR (March 10): UEM Land Bhd, a wholly-owned subsidiary of UEM Sunrise Bhd, has entered into a conditional sale and purchase agreement (SPA) to buy a 9.93-acre leasehold piece of factory land and the buildings thereon from Dutch Lady Milk Industries Bhd at Section 13, Petaling Jaya for RM200 million, with plans to build a RM1.3 billion mixed-use development there.

In a statement, UEM Sunrise said the group plans to launch the project – which will be situated along Jalan Khoo Kay Kim – in the next two to three years.

UEM Sunrise chief executive officer Sufian Abdullah said the latest land acquisition bodes well with its ongoing efforts to rebalance the group portfolio and increase its foothold in the Klang Valley.

"What attracted us most about this land is its location within the Draft Special Area Plan Section 13 Petaling Jaya, identified by Majlis Bandaraya Petaling Jaya to redevelop the area into a commercial hub as part of its urban renewal efforts.

"With the land strategically located in Petaling Jaya, its proximity to the central business districts and the education hub, we want to accommodate first-time homebuyers, young or small families and customers looking for investment opportunities in targeting short- or long-term tenancies by young professionals and students in the various universities and colleges nearby," Sufian said.

Section 13 of Petaling Jaya is located just minutes from the Damansara-Puchong Expressway, Sprint Expressway-Kerinchi Link, Federal Highway and North Pantai Expressway, all of which will take the residents right into the heart of Kuala Lumpur city centre.

Situated within the 10km radius are world-class healthcare providers such as Columbia Asia Hospital and University Malaya Medical Centre; higher education institutions including Brickfields Asia College, Mahsa University, Universiti Malaya and KDU University College.

The land is also easily accessible via public transportation with the Taman Jaya LRT Station located 2.7km away and an LRT feeder bus that passes by the development every 30 minutes.

With the latest additions, UEM Sunrise's total land bank stands at 11,092.8 acres, amounting to RM107.9 billion in GDV.

Meanwhile, Dutch Lady said in a filing with Bursa Malaysia that the disposal of the land is expected to result in a net gain of about RM178.6 million, translating into an increase in earnings per share by approximately 279 sen, based on the weighted average number of ordinary shares in issue as at Dec 31, 2020.

It also said the board will review and determine the use of the gross cash proceeds of RM200 million by the end of 2021, which may include financing the construction of its new manufacturing and warehousing facilities in Bandar Enstek, Negeri Sembilan, which is scheduled to start this year and be completed in three years.

Until completion of the new facilities, Dutch Lady will continue its manufacturing activities at the Petaling Jaya property as a tenant after the conclusion of the disposal, which is expected to be at the end of this year.

Dutch Lady closed six sen or 0.17% higher at RM34.82, valuing the company at RM2.23 billion. Meanwhile, UEM Sunrise closed one sen or 2.13% lower at 46 sen, giving it a market capitalisation of RM2.33 billion.