A project previously known as The Presidence at Jalan Baru. Picture is for illustration only.

Property developer Hua Yang Bhd is proposing a mixed development with an estimated gross development value (GDV) of RM311 million in Seberang Prai, Penang, which will comprise 480 units of serviced apartments, 148 units of condominium, and 16 units of two-storey shops (previously known as The Presidence along Jalan Baru).

In a filing with Bursa Malaysia today, it was revealed that the plan will first involve Hua Yang acquiring G Land Development Sdn Bhd, a company based in Bukit Mertajam, Penang, for RM16.55 million.

On completion of the acquisition, G Land, as a wholly-owned unit of Hua Yang, will then acquire from GIM Standard Development Sdn Bhd, also based in Penang, six parcels of freehold land measuring 8.59 acres for RM25 million, cash. The net book value of the land is RM7.98 million.

The directors of GIM Standard are Khor Chong Hai, Khor Chong Guan and Ng Siew Hui. The land parcels, located 3km from the Penang bridge, will be developed into the proposed mixed development.

The purchase price for the tracts was arrived at on a willing buyer willing seller basis, after considering the development potential of the parcels and comparing the properties with the market value of matured properties around the area, said Hua Yang. No formal valuation was commissioned.

To effect the first acquisition, Hua Yang has entered into a conditional shares sales agreement with Phuah Cheng Peng and Ng Kok Kheng today to acquire the entire stake in G Land.

Hua Yang said it is still preliminary to ascertain the total development cost of the mixed project, the expected commencement date of the development, and the expected profits to be derived from the development of the property.

But it noted that the development cost of the property will be funded by internally generated funds.

It added that the acquisitions are in line with the Hua Yang Group’s objective to expand into mainland Penang, and is expected to contribute positively to its future earnings.

Its board expects the proposed acquisition to be completed by the fourth quarter of the financial year ending March 31, 2016.

Hua Yang shares closed down 2 sen or 1.04% today at RM1.91, with a market capitalisation of RM504.24 million.

Source: TheEdgeMarkets.com