Ideal United Bintang International Berhad (IUBIB) has announced to Bursa Malaysia its proposed acquisition of 1st Avenue Mall in George Town at RM153 million last week.

The company’s subsidiary, I Homes Properties Sdn Bhd (IHomes), entered into a conditional sales and purchase agreement with 1st Avenue Mall Sdn Bhd (1AMSB) for the proposed acquisition of the property located along Magazine Road based on a willing-buyer willing-seller basis.

IUBIB, in a statement issued last week, said the agreement was signed after taking into account the market value of the property of RM220 million and the purchase consideration was at a 30.45 per cent discount of the market value.

1st Avenue Mall, opened nine years ago, has 407,076 sq ft of net lettable space and is sited within the inner city of George Town. It is connected to Komtar and another mall, Prangin Mall, through indoor pedestrian bridges.

In the same announcement, IUBIB said the proposed acquisition will result in the diversion of 25 per cent or more of its consolidated net assets into property investment holding, which is different from its core business of property development operations.

“As such, IUBIB will seek approval from the shareholders of the company at an Extraordinary General Meeting (EGM) for the proposed diversification in conjunction with the proposed acquisition,” it said.

It added that the proposed acquisition is the group’s first venture into property investment holding and it is confident that it will generate positive returns from appreciation in real estate prices and also from rental income from the mall which currently has a 90 per cent occupancy rate.

“The group intends to continue renting out 1st Avenue as a source of income and recognises that the property has potential to be redeveloped in future as it is in a prime location within the city of Penang,” it said.

The proposed acquisition and diversification are subjected to approval of shareholders at an EGM and other relevant authorities.

Source: MalayMail.com