NEW GROWTH ENGINE: Penang-based developer in talks with Sime Darby to buy land in Sungai Buloh
Eastern & Oriental Bhd (E&O) is looking at a vital new growth engine by building its first township in the Klang Valley.
The Penang-based developer is in talks with its major shareholder, Sime Darby Bhd, to buy 55ha of land in Sungai Buloh, Selangor.
The latter owns 32 per cent of E&O. The plot is part of the larger 341ha under Sime Darby’s Elmina West estate off the Guthrie Corridor Expressway.
Both parties yesterday sealed a memorandum of agreement to facilitate discussions and valuation on the land acquisition.
A firm sale and purchase agreement is expected by March next year, E&O told Bursa Malaysia yesterday.
The company has been busier in Penang with key projects such as Seri Tanjung Pinang, although it also owns tracts of land with smallscale projects in the Klang Valley.
It is also developing 85ha of land at Medini Central in Iskandar Malaysia, with an estimated gross development value of RM3.5 billion.
E&O is reportedly targeting to launch RM1.5 billion to RM2 billion of property projects a year from financial year ending March 31 2014 to 2016.
This will be increased to RM3 billion to RM4 billion worth of launches to achieve sustainable net profits of RM270 million to RM300 million from 2017 onwards.
If it materialises, the freehold Sungai Buloh land will be its maiden township project in the Klang Valley, the company said.
The project will be based entirely on a wellness theme, comprising both commercial real estate and lifestyle residential development.
“The development will offer E&O ample opportunity to deliver unique wellness products that meet the aspirational lifestyle needs of an increasingly discerning market,” it said.