KSL to buy UK High Commission land for RM25m

Property developer KSL Holdings Bhd is proposing to acquire a 3,384 square metre (about 0.8 acre) plot of land in Jalan Madge here from the Secretary of State for Foreign and Commonwealth Affairs of the United Kingdom for RM25.4 million cash.

The plot is currently the site of the residence of the UK High Commissioner to Malaysia.

In an announcement to Bursa Malaysia Securities yesterday, KSL said the objective of the acquisition was to replenish the group’s landbank.

KSL said it was in line with the group’s objective of increasing its landbank in strategic locations, especially in the fast-growing Klang Valley, for its future property development activities.

According to KSL’s executive director Ku Tien Sek, the company is likely to build condominiums on the land.

“It’s a small parcel, but land in that area is hard to come by. We are paying about RM700 per sq ft which is still reasonable. We feel the RM25.4 million price tag is still reasonable.

“Perhaps we could build condominiums, say around 60 units,” he said in a phone interview with The Edge Financial Daily yesterday after the announcement was made.

Goodpark Development Sdn Bhd, the wholly owned unit of KSL, which will acquire the land, intends to finance the acquisition through internal funds and/or bank borrowings. As at March 31 this year, KSL had cash and bank balances of RM64.19 million while its trade and other receivables stood at about RM65.66 million.

For its first three months of FY2010, ended March 31, KSL posted a net profit of RM16.07 million on the back of RM53.54 million in revenue. Compared to the corresponding period a year earlier, net profit dipped by about 5% despite revenue gaining by about 17%.

As at Dec 31, 2009, KSL’s landbank stood at 2,100 acres. According to its latest annual report, for FY2009, the bulk of its landbank was located in Johor, with one large plot of 446.4 acres forming part of the Blackwater Estate in Klang, Selangor.

The Ku family, via its vehicle Premier Sector Sdn Bhd, is the largest shareholder of KSL with 37.47% equity interest. Other substantial shareholders of KSL include pilgrim fund Lembaga Tabung Haji which has 8.83%.

KSL closed at RM1.31 yesterday, gaining two sen, with 22,600 shares done.



Written by Jose Barrock
This article appeared in The Edge Financial Daily, June 15, 2010.