Fresh from the aborted plans to develop the redevelopment of Lot 76 along Jalan Ampang - Crest Builder made a land acquisition in Klang yesterday. 

Today - The Star reported that Crest Builder Holdings Berhad’s wholly owned subsidiary, CB Land Sdn Bhd, has inked a sale and purchase agreement (SPA) with Gemilang Waras Sdn Bhd, a subsidiary of WCT Land Sdn Bhd, to acquire a plot of freehold land in Klang for RM55mil.

In a release, Crest Builder said that the acquisition price was arrived on a “willing buyer, willing seller” basis, after taking into account the prospects of the said land, the proposed development and property prices in the surrounding area.

Based on its preliminary plan, Crest Builder intends to develop the land into a mixed development of three blocks of residential serviced apartments and commercial shop lots. The gross development value is estimated to be above RM500mil.

A quick check on Google Maps shows the exact location of the land - situated about 500m from TESCO Extra BBT Klang and about 400m from AEON Bukit Tinggi. It is just about 1.5km from the KESAS interchange. 

As per The Star's report - the projected GDV is expected to be about RM 500 mil. Based on the acquisition price of RM 55 mil, this amounts to about 11% of total GDV - which is considered to be very low for a land located in a matured neighbourhood. 

I think this project would be able to give - say a gross 20% margin over 4 years, starting 2021. 2020 would be submissions, approvals etc, so a Q3 launch perhaps? So, with RM 100 mil margin - that is RM 25 mil per year from this project, to be contributing to the bottomline starting 2021-2024.