WCT Holdings Bhd is selling land pieces that aren't part of the group's core development ambitions, including the site in Ulu Selangor's Serendah, unlocking the value, its group managing director Datuk Lee Tuck Fook said.
It is selling 12 parcels of freehold land in Serendah, totalling 244.1 hectares (ha) in size for RM214.3 million.
Lee said WCT had intended to develop these plots into a township in a partnership with UEM Sunrise Bhd back in 2015, but the project fell through.
"The lands that we are selling (in Serendah) are the same parcels of land that were earmarked for the previous venture. Subsequently, a decision was made to abort the joint venture due to weak property market conditions at that time," he said.
Lee told NST Property that WCT did not explore any other options, including partnerships with other developers for the said land.
He said the group decided to sell the land as part of its de-gearing initiative.
According to Lee, as a result of the sale, WCT will have no remaining landbank in Serendah.
WCT's indirect wholly-owned property development unit Jubilant Courtyard Sdn Bhd (JCSB) is selling the 12 plots of land to privately-owned MDCon (Simpang Empat) Sdn Bhd.
On August 16, 2021, it was announced that JCSB, which is 100 per cent owned by WCT Land, a wholly-owned subsidiary of WCT, had signed a sale and purchase agreement (SPA) with MDCon for the proposed land sale.
JCSB is selling nine lots with a total nett land area of 16.67 million square ft at RM7.50 per square ft (psf) and three parcels with a combined nett land area of 7.44 million sq ft at RM12.00 psf.
It was revealed last month that WCT spent RM134.92 million on the 12 parcels of land it purchased back in 2014.
A pro forma gain of RM45.53 million will arise from the land transaction.
The proceeds from the land sale will be used to fund working capital, business expansion, and debt reduction for WCT, it said in a stock exchange filing.
On the group's expansion, Lee said that WCT was committed to increasing its core engineering and construction businesses and property development, investment, and management businesses.
Lee said it is projected that WCT will still have roughly 87ha in its coffers once the 12 parcels of land are sold.
He said the group would keep looking for ways to get rid of non-essential land and develop the rest.
Construction will focus on affordable luxury houses with self-contained community lifestyle development concepts, emphasising connectedness, safety, and convenience for multigenerational communities, he said.
Lee said the group would continue to explore opportunities to acquire suitable landbank in strategic locations to meet the group's development plans and needs.
Meanwhile, Lee said that the group's property development business would focus its efforts on reducing the number of unsold properties, both completed and under construction, between now and the end of the year, using innovative technology and new marketing channels,
This year, he stated, there would be no new releases of any kind.
Klang Valley and Johor Bahru will see new launches in 2022, with a combined gross development value of RM2 billion, he said.
Products will be priced and packaged according to market sentiments and demand, he explained.
"We do believe that developers will have a better future. We expect the successful rollout of vaccines in 2021 under the National Covid-19 Immunisation Programme to lift market sentiments and stimulate the demand for property development offers and launches. This will lead to a more robust growth in 2022 and going forward," he said.
Lee said some of the challenges and concerns are risks of the emergence of a new wave of Covid-19, property overhang, increasing land, construction and development cost, and changes in consumer demands.
In anticipation of the epidemic being contained by 2022, the market's mood will improve, leading to more property launches and the forecast increase in property sales, he said.