KUALA LUMPUR (July 16): Construction company Vestland Bhd (KL:VLB) is acquiring office suites in Selangor and industrial warehouses in Sabah, for a total of RM25 million.

In a filing with Bursa Malaysia, Vestland said its wholly owned subsidiary Vestland Resources Sdn Bhd had signed 10 sales and purchase agreements (SPAs) with Sg Besi Construction Sdn Bhd for the acquisition of 10 office suites at Subplace Boulevard, Shah Alam, Selangor, for RM6.99 million.

Vestland said upon completion of the proposed acquisition, the group will no longer incur RM20,934 in monthly rental commitment and will have better planning and control over the usage of the offices to cater for its business growth.

In addition, Vestland also signed six SPAs for a sum of RM18 million to acquire six semi-detached industrial warehouses to be constructed at Armani Business Park, Kota Kinabalu, Sabah, with completion expected by December 2024.

“It would be more flexible, cost effective and efficient for the group to own warehouses in Sabah to store materials/machineries (which are mostly sourced from Peninsular Malaysia) to be used for its construction projects in Sabah,” Vestland said.

“The group will be able to plan its procurement of raw materials through bulk purchase as they can be stored in the warehouses and be deployed to construction sites as and when required,” it added.

Vestland intends to fund the proposed office acquisition via internally generated funds, while the proposed warehouse acquisition will be funded through a mix of internally generated funds and bank borrowings.

Shares in Vestland, which have risen over 40% since the start of this year, settled half a sen or 1.01% lower at 49 sen on Tuesday, valuing the company at RM462.71 million.