Magna Prima to buy Shah Alam land for condo project

Magna Prima Bhd’s wholly-owned unit Magna City Shah Alam Sdn Bhd (MCSASB) plans to buy a piece of leasehold land measuring 5.25 acres (2.12ha) in Bandar Shah Alam, Selangor, for RM43 million to undertake a residential development that will carry an estimated gross development value of RM220.81 million.

In a filing with Bursa Malaysia, Magna Prima said MCSASB has entered into a conditional sale and purchase agreement with Regalia Raintree Sdn Bhd to effect the land buy.

“The total development cost is estimated to be RM180.69 million with an expected gross profit of RM40.12 million,” it said.

The land was valued by Messrs Khong & Jaafar Sdn Bhd at RM38 million as at April 15.

The company plans to develop three 15-storey condominium blocks, with 315 units in all, and five shop offices. There will also be 953 parking bays for the entire project.

The proposed development is expected to commence in the third quarter of 2016 and is estimated to be completed by 2019, with development cost to be financed via a combination of internal funds and/or bank borrowings, the quantum of which has yet to be fixed.

“The proposed name of the project is The View Residence,” it said.

The proposed acquisition will enable it to immediately embark on a small-scale development amid the slowdown in the property market, considering that the necessary approvals for the land has been obtained from the Shah Alam City Council, it said.

Magna Prima said it has engaged PPC International Sdn Bhd, another independent firm of valuers, to assess the viability of the proposed development. PPC opines that it is not appropriate for the group to undertake development of its existing land banks (which are generally large landbank) in the short term, given the present state of the property market. - The Edge Property