In early July 2014, Keladi Maju announced that it offers came into into an SPA to acquire 9 parcels of land in Mukim Batu, Kuala Lumpur from Goh Ban Huat (GBH) for RM192.4mil. The 13.93 acres of land in Segambut consists of 6 parcels of freehold and 3 parcels of leasehold land. GBH’s office, factories, and warehouses take a seat on the land currently.
The price should be about RM317 per sq ft. GBH is another listed company which involves in ceramic products manufacturing and trading mainly. Both Keladi and GBH have similar major shareholder & chairman, which are Tan Sri Dato Tan Hua Choon. The goal of the land sale by GBH is to partly fund its reversed takeover of Dynac to venture into the Oil & Gas sector. As Keladi is a house developer which has development tasks only in Kulim mainly, Kedah, the shot of land in the country’s property hotspot is definitely very positive for the group. However, Keladi can’t develop the obtained land soon, as it houses GBH’s current operating facilities.
Keladi has entered into a tenancy agreement with GBH to rent back again the land & buildings to GBH at a rental of RM350, per month 000. So that it will be RM4.2mil pre-tax rental profit for Keladi. That is equivalent to 14% of its earlier FY’s PBT which seems not bad indeed. But, its FY14’s interest income of RM4.1mil will be reduced considerably for sure, and it has to start to serve the loan interest afterwards.
It’s likely that GBH will retreat from its ceramic business gradually and focus on its O&G endeavor. For Keladi, it has approximately 1,400 acres of land in Kulim region, where 667 acres of them is planted with oil palms presently. Keladi recent projects are Taman Lagenda near Padang Serai and Taman Kulim Square Indah near Kulim town. As at 31 Jan 2014, they have sold a complete of 3,825 units of properties from these 2 projects, with nearly 100% take-up rate. Personally I think quite surprise because it’s hard for me to assume that the house demand in Padang Serai can be so high.
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Anyway, Keladi creates low & medium-cost affordable houses mainly. For FY15, besides continue to launch new phases for Taman Lagenda, Keladi also plans to build up 455 units of single story terrace and 152 units of shop houses in Mukim Padang Meha that was converted from its plantation land. It may also start Taman Puteri in Padang Serai, which includes 1,585 units blended development.
Thanks to its high take up rate in recent launch, Keladi’s financial performance has been good for the past 24 months. Income in FY13 rose credited to high property structure billing greatly, while the rise in PBT in the same FY was partly credited to a good value gain of RM30.3mil (re-measurement of a co-employee under liquidation to other investments).