Kedah-based EUPE Corp Bhd plans to develop a high-rise residential project on 1.95 hectares of leasehold land along Jalan Damansara and Jalan Belfield in Kampung Attap, Kuala Lumpur.
The company has entered into a conditional agreement to purchase the land from Cahaya Tinggi Sdn Bhd for RM125 million through its indirect wholly-owned subsidiary, EUPE Belfield Sdn Bhd.
The lease on the land expires on December 3, 2118.
In a stock exchange filing yesterday, EUPE stated that the proposed acquisition is consistent with the company's business expansion goal and growth strategy of acquiring new suitable land to add to its landbank.
EUPE said that it is purchasing the land to expand its property development portfolio and generate an additional stream of income for the company in the future.
With the upcoming completion of catalytic developments such as Bandar Malaysia and Merdeka 118, as well as prominent landmarks such as Stadium Merdeka, Royal Museum, KL Sentral, and Petaling Street, the company said that the Belfield land will be a strategic location for a residential property development targeted to city dwellers, owing to its strategic location, proximity to amenities, and tranquil environment.
"The board is deliberating on the development plan for the Belfield land. The board intends to undertake high-rise residential development on the Belfield Land after the completion of the proposed acquisition," it said.
However, EUPE said that it is unable to confirm the details of the said development at this time, including, among other things, the timeframe for completion, development costs, and eventual funding requirements because the plan is still in the preliminary stage.
Nonetheless, the board said that the proposed acquisition represented an opportunity for the company to own the entire interests of land in a strategic location with strong growth potential to increase the gross development value of its development projects, which is expected to provide greater sustainability for the group's future earnings.
"Notwithstanding the above, the board takes cognisance that the effects of Covid-19 are still prevalent in the recovery of the Malaysian economy. There is no assurance that any resurgence of Covid-19 cases or decline in economic conditions may adversely impact EUPE's existing business operations and financial position, as well as the future development of the Belfield land.
"Nonetheless, the board anticipates the gradual recovery of the property development industry given the government incentives to boost the industry by providing tax exemptions as well as the reopening of international borders, and a further improvement in labour market conditions," it said.
EUPE said that it remains optimistic about the prospects of the Belfield land and its potential development because it is located in a prominent location with ongoing mixed development, namely Sunway Belfield nearby, future developments, and easy access to surrounding facilities.
The proposed acquisition is expected to be completed by the second half of 2022, assuming no unforeseen circumstances arise and all necessary approvals are obtained.