Scientex plans to buy land in Johor for RM381mil

PETALING JAYA: Scientex Bhd is proposing to acquire 14 parcels of freehold land in Johor Baru, Johor for RM381.4mil, to be built into a mixed-property development project.

In a filing with Bursa Malaysia, the packaging manufacturer and property developer said the deal was carried out by its wholly-owned subsidiary, Scientex Quatari Sdn Bhd, with Lee Pineapple Co (Pte) Ltd, a Singaporean investment holding and oil palm planting company.

This proposed acquisition will be funded by internally generated funds and bank borrowings. As at Jan 31, 2024, Scientex’s net gearing ratio stood at 0.15 times.

The group noted that it is still too early to ascertain the exact total gross development value, development cost, the expected commencement and completion dates of the development and the expected profits to be derived from the development.

With an aggregate area of 350.2568 acres, the 14 parcels of land are surrounded by the existing Sri Pulai Perdana 2 and Bandar Pulai Jaya (due north), Bandar Baru Kangkar Pulai (due north-west) and is located adjacent to the group’s existing developments namely, Taman Pulai Mutiara, Taman Pulai Mutiara 2, and Taman Pulai Duta.

Scientex stated that following overwhelming response from Taman Pulai Mutiara (its first development in Pulai, Johor), the group continued its expansion in Pulai with the developments of Taman Pulai Mutiara 2 and Taman Pulai Duta. To date, more than 90% of the units launched in Pulai have been sold.

The close proximity between Scientex’s existing developments and the proposed development is expected to enable it to generate better operational efficiencies, through greater economies of scale to be achieved during project implementation.

Moreover, the group also noted the proposed acquisition represents a strategic investment opportunity in view of rising property prices and robust demand for affordable homes from the low and middle-income groups.

This land bank expansion is also in line with Scientex’s goal to build more affordable homes to meet its objective of completing 50,000 affordable homes throughout the nation by 2028.

Further, the freehold land is expected to provide a steady and sustainable property development model as Scientex continues to focus on affordably priced landed properties where demand continues to remain firm and resilient.

For the second quarter ended Jan 31, 2024 (2Q24), Scientex recorded a 33% increase year-on-year (y-o-y) in its net profit to RM141.01mil. Revenue rose by 12% y-o-y to RM1.09bil. The group said the results were due to better performance from the property division.

Property revenue stood at RM456.9mil in 2Q24, reflecting an increase of 41.3% compared to RM323.3mil recorded in the preceding year corresponding quarter.

The higher revenue was contributed by steady construction progress for all developments in northern, central and southern peninsular Malaysia.

Its new launches in Sungai Dua (Penang), Sungai Petani (Kedah), Ipoh (Perak), Jasin (Melaka) and Pulai (Johor) also received overwhelming take-up rates.