GEORGE TOWN: GUH Holdings Bhd is buying land for the development of a light industrial park in Seberang Perai — a plan to cultivate future earnings growth in its property division. 

In a filing with Bursa Malaysia, GUH Holdings said its unit GUH Realty Sdn Bhd (GRSB) entered into a sale and purchase agreement (SPA) with Leader Holdings and vendor Thow Gooi Chee to acquire the land measuring 4.9ha in Ladang Valdor, Seberang Perai Selatan, Penang, for RM22.6 million. 

It said the land parcels, one measuring 2.61ha at RM12.08 million and the other 2.27ha at RM10.5 million, are strategically located in the southern Penang district which has seen the initiation of several government economic programmes such as the Batu Kawan Industrial Park development.

GUH Holdings is of the view that there would be growing demand for light industrial factories from small and medium suppliers who would want to be located close to their customers.

“The proposed acquisitions are in line with the ongoing plan of the GUH group to increase and diversify its property land bank in strategic locations with high development value.

“The subsequent proposed development of a light industrial park is part of the GUH group’s continuous effort to increase and sustain its earnings growth in the property development segment,” it said.

It estimated a six-month completion time frame for the proposed acquisition from the date of the SPA.

The land purchase would be funded through bank borrowings and/or internally generated funds, GUH Holdings said.

The proposed acquisitions would not have any material impact on the earnings in the group’s financial year ending Dec 31, 2015, but is expected to contribute positively to future earnings and earnings per share.

GUH Holdings is involved in a myriad of activities, including the manufacture and sale of hybrid printed circuit boards, project management and construction of waste water and water treatment plants, property development, and trading in electrical goods and appliances.

In assessing its risk, GUH Holdings said it might be exposed to competition from similar developments in the surrounding areas, sensitivity to economic downturn and oversupply in the property market.

This article first appeared in digitaledge Daily, on September 10, 2015.