Kanger International Berhad is investing RM142.9 million in a block of serviced suites in Malaysia's top destination resort Genting Highlands in Pahang, marking its entry into the local property investment market.
The ACE Market-listed group is acquiring the serviced suites from Aset Kayamas Sdn Bhd, the developer of Antara Genting Highlands Resort Suites (Antara @ Genting Highlands).
Antara @ Genting Highlands is located on 5.33 acres of freehold land, about 850 meters away from SkyAvenue, a premier shopping mall at the hill resort, and nearby Awana Skyway Chin Swee Station, one of the cable car stations.
The project comprises four towers of 44 to 46 storeys serviced apartments, with a total of 1,460 units.
It is slated to have a covered walkway to SkyAvenue.
In a filing with Bursa Malaysia today, Kanger said that a wholly-owned subsidiary, Kanger Ventures Sdn Bhd had signed a commercial agreement with Aset Kayamas for the RM142.9 million investment in one of the towers (Tower A).
Kanger intends to raise funds via a proposed rights issue with warrants to fund the acquisition.
Its executive director, Steven Kuah Choon Chin said in a statement that developments in Genting Highlands have accelerated in recent years, and the group is upbeat that the tourist hot spot will continue to grow as a vibrant tourist destination in the years to come.
"By expanding our property investment portfolio to Genting Highlands, this would put the group in a strong position to capitalise on the future growth prospects and increase in visitor traffic there," he said.
Genting Highlands, first established in 1965 is an integrated hill resort development, soaring at 6,000 feet above sea level.
It is one of the most popular tourist destinations in Malaysia attracting millions of local and international tourists every year.
The tourism resort is home to multiple hotels, theme parks, casinos, and shopping malls, which include premium outlets selling branded products at lower prices and is just an hour's drive from Kuala Lumpur city.
A major upcoming attraction is the highly anticipated new outdoor theme park, Genting SkyWorlds, which is set to open to the public by the middle of this year.
Genting Malaysia Bhd's Resorts World Genting (RWG) which yesterday officially unveiled the logo of Genting SkyWorlds, said it has spent over US$800 million on the theme park.
RWG head of business operations and strategies Lee Thiam Kit, said in a virtual briefing that the theme park is almost ready.
"We are putting the finishing touches on this amazing theme park, which we believe to be Southeast Asia's most anticipated theme park," Lee said.
The theme park, spanning 26 acres will have 26 rides and attractions. It can easily accommodate some 20,000 tourists.
Kuah said Kanger is of the view that new attractions such as Genting SkyWorlds will augur well to drive up local and international tourist arrivals.
"Antara @ Genting Highlands is within walking distance to Genting SkyWorld, SkyAvenue and all the casinos. These attractions coupled with all the infrastructure in place, we are bullish that our serviced suites and wellness centre would be highly sought after," Kuah told NST Property.
Kuah said some of the serviced apartments will be converted into a wellness centre, offering stem cell treatments that enhance peoples' health and well-being.
"We want to promote health tourism. We will target local and international tourists to undergo their treatment and recovery of stem cell therapy at our centre," he said.
Kuah said the serviced suites coupled with the wellness suites will further enhance the group's income from the property investment segment.
"This investment is a new milestone for Kanger. We expect rental yields to be in the range of seven per cent to nine per cent per annum as the properties are located in a premier destination," Kuah said.
Outside of Malaysia Kanger has two investment properties in China, contributing a total rental income of about RM11.1 million a year.
The two properties are owned by Kanger's indirect wholly-owned subsidiary Ganzhou Kanger Industrial Co Ltd.
On March 9, 2020, Kanger entered into 10-year lease agreements for two commercial buildings located in Ganzhou City, Jiangxi Province. It is leasing AutoCity, a purpose-built six-storey building with a net lettable area (NLA) of 493,062 sq ft, and the 19-storey Kyriad Hotel with an NLA of 190,715 sq ft.
Kuah said Kanger currently derives almost half of its revenue from foreign exports, and the aim is to have more income coming from its investments in Malaysia.
"We want to build the group's business operations in Malaysia and diversify the income stream," he said.
Since 2013, Kanger together with its subsidiaries has been involved in the manufacturing and trading of bamboo flooring, bamboo furniture, hardwood, and laminated flooring.
In 2015, Kanger obtained its shareholders' approval to diversify into property development, investment, and management.
The group is now investing RM77 million in a glove manufacturing facility in Ijok, Selangor, to produce medical, surgical, and/or nitrile gloves.