Knusford buys land in Tanjung Danga to capitalise on the Johor Baru-Singapore RTS's potential

 By Sharen Kaur - Published in NST Property, May 17, 2022

Knusford Bhd is a property development and construction group. Image credit: www.knusford.com.my

sharen@nst.com.my

Knusford Bhd is acquiring two plots of vacant unconverted developed land in Tanjung Danga, Johor, to capitalise on the potential of the Johor Baru-Singapore Rapid Transit System (RTS).

Iskandar Waterfront City Bhd (IWCity), controlled by tycoon Tan Sri Lim Kang Hoo, is selling the lands to the property development and construction company.

This is a related party transaction as Lim is the common shareholder of the two companies.

Lim, the executive vice chairman and a major shareholder in IWCity, owns 0.6 per cent direct and 34.29 per cent indirect shares through Iskandar Waterfront Holdings Sdn Bhd and Credence Resources Sdn Bhd, respectively.

By virtue of his shareholdings in Aman Setegap Sdn Bhd and Kinston Park Sdn Bhd, he is also a big shareholder in Knusford, with 0.62 per cent direct interest and 32.53 per cent indirect interest.

Knusford told Bursa Malaysia last Friday the proposed acquisition is designed to extend the company's landbank in Johor Baru, which could be used for future development in light of the upcoming Johor Baru-Singapore RTS project.

The lands are located within Kampung Tanjung Danga, on the western side of Johor Bahru, near Lebuhraya Sultan Iskandar, some 13 kilometres (km) west of Johor Bahru city centre, according to Knusford.

The Johor – Singapore Causeway, which connects Johor Bahru over the Johor Straits to Woodlands in Singapore, is around 12km south-east of the subject properties, it said.

"The mode of payment for the proposed acquisition will be via partial settlement of the outstanding amount owing to the group," it said.

IWCity, in its stock exchange filing, said that its wholly-owned subsidiary Success Straits Sdn Bhd entered into a heads of agreement with Knusford or its nominee for an indicative disposal consideration ranging from RM90 million to RM95 million.

According to IWCity, the final consideration shall be determined based on the valuation opined by the independent valuers mutually agreed to be appointed by both parties.

The combined size of the two parcels of freehold land spans 9.841 acres.

According to IWCity, the original cost of the land is RM93.38 million, and it was acquired on March 3, 2017.

"The proposed disposal provides an opportunity for the company to unlock value for the investment made in the lands and secure proceeds and potential use for settlement of amount owing between the parties," IWCity said.