SMRT to acquire eight properties in Kota Kinabalu for RM14.7 mil

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KUALA LUMPUR: SMRT Holdings Bhd is acquiring eight adjoining units of four storey terrace shop and office properties located in Kota Kinabalu, Sabah for RM14.7 million, partly for future rental income and potential capital appreciation.

In a bourse filing on Tuesday (Sept 6), SMRT said its wholly-owned subsidiary Strategic Ambience Sdn Bhd has entered into a sale and purchase agreement with Koperasi NLFCS Bhd for the eight leasehold properties, comprising six units of intermediate units and two corner units.

The properties consist of unexpired leasehold interest of about 70 years, with town lease titles.

“Post acquisition, the current lease agreement between Koperasi NLFCS and the college, Cyberjaya College Kota Kinabalu Sdn Bhd, will be terminated.

“It is the intention of SMRT to enter into a fresh lease agreement with Cyberjaya College Kota Kinabalu, with terms and conditions to be supported by an independent valuation and any other relevant provisions as stipulated within Bursa Malaysia Securities Bhd’s listing requirements,” SMRT said.

Koperasi NLFCS was incorporated in Malaysia as a co-operative society under the Malaysia Co-Operative Societies Commission, with its principal core activities being asset-based investment and management of investment schemes contributed by co-operative society members.

The proposed acquisition will be funded by a combination of bank borrowings and internally-generated funds and is expected to be completed by the end of December.

SMRT said it is investing in education-based properties, which it expects to provide a steady rental income stream, as well as to leverage on the potential appreciation.

Looking ahead, SMRT believes that the proposed acquisition will be beneficial to the group and its shareholders as a whole, as the properties are well known and utilised as a college, and are in a desirable location after taking into consideration the easy accessibility of students.

Additionally, Kota Kinabalu city centre is located approximately 6 kilometres south-west of the properties.

SMRT’s share price closed 3.7% or half a sen lower to 13 sen on Tuesday, which translates into a market capitalisation of RM58.2 million.

Source : The Edge Markets

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