Eastland Equity to acquire development rights to Damai Suites project in Kota Kinabalu

PETALING JAYA: Eastland Equity Bhd’s wholly owned subsidiary FBO Land (Setapak) Sdn Bhd has entered into a conditional sale and purchase agreement (CSPA) with Inland World Sdn Bhd (IWSB) for the proposed acquisition of development rights to short- to medium-stay property Damai Suites in Kota Kinabalu, Sabah, for RM8 million.

The project comprises retail outlets, commercial suites, automated carpark and facilities floor. The commercial suites are mainly for usage as “home office and entrepreneur startup”, with the concept fuelled by the Covid-19 pandemic that encourages people to adopt a work-from-home lifestyle. The project also caters to the short- to medium-stay property market.

The project has an estimated gross development value (GDV) of RM102.29 million, while its estimated gross development cost (GDC) is RM74.64 million.

“The business concept behind the project is the development of a dedicated short to medium stay property, aimed at investors looking for investment properties such as ‘home office and entrepreneur start-up’ or ‘short- and mid-term stay’ to tap into the growing Kota Kinabalu market,” Eastland Equity said in a stock exchange filing.

Eastland Equity intends to finance the project with internal funds and bank loans.

It said the exercise is one of the fastest ways for it to embark on a profitable development project to rebuild its brand, after the cautious pace it has adopted in Phase 2 of Bandar Tasek Raja in Pasir Mas, Kelantan. It is also in line with the company’s strategy to enhance its profile and establish its market presence outside Kelantan.

“Based on the GDV and the GDC, the project is anticipated to improve the financial performance of the group’s property development business and contribute positively to the future earnings of the group. The profits from the project will enable Eastland to have efficient tax planning by utilising its subsidiary’s unabsorbed tax losses,” said Eastland Equity.

The project is expected to generate a gross development profit of and cash flow of RM19.65 million and RM9.92 million respectively.

The transaction is expected to be completed in the fourth quarter of 2020.

source https://www.thesundaily.my/business/eastland-equity-to-acquire-development-rights-to-damai-suites-project-in-kota-kinabalu-JB3542209