KUALA LUMPUR, March 9 ― DRB-Hicom Bhd has proposed to swap its non-industrial property assets and its entire hospitality portfolio for industrial land in Tebrau, Johor, in a deal worth RM1.9 billion.
According to English daily The Star, the diversified group said in a statement yesterday that the disposal was part of an exercise to set a new direction for its property business.
The plan to sell large portion of non-industrial land assets and exit the hospitality industry, and acquire a sizeable industrial land in Johor is a move to take advantage of its experience in the development industrial properties.
The group would sell several subsidiaries that own some 2,268.43 acres of land together with buildings erected on them located in Shah Alam, Klang, Puchong, Jalan Tun Razak, Batu Caves, Johor Baru and Terengganu collectively valued at RM1.93 billion.
In return, DRB-Hicom will obtain 1,243.45 acres of freehold industrial land in Tebrau, Johor, and cash payment of RM289 million for the balance, according to a filing with Bursa Malaysia.
DRB-Hicom is expected to realise a net gain on disposal of about RM849 million from the asset swap deal and the transaction is expected to be completed within the first quarter of 2019.
DRB-Hicom group managing director Datuk Seri Syed Faisal Albar said the transaction would indicate a shift in focus for its property sector to leverage the group’s experience in industrial property development.
“There is a 30-year experience as an industrial property developer that DRB-Hicom has in its history, and this transaction affords us the opportunity to leverage on this capability.
“With the incoming land bank in Johor, the group is in an advantageous position to tap into the high demand of industrial parks especially from Singapore.
“DRB-Hicom intends to develop this into a high-tech and modern industrial park once the property market recovers from its current slumber,” Syed Faisal said in a statement.
