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Monday, April 14, 2008

Dijaya mulls land sale for RM25m

PROPERTY developer Dijaya Corp Bhd is mulling the sale of its 207ha agricultural land in Perak for some RM25 million to help fund its Tropicana City mixed development in Petaling Jaya.

"We may consider selling the land in Behrang. The money can then be used to top up the working capital for Tropicana City," Dijaya managing director Tong Kien Onn told Business Times in an interview.

SHOPPING CENTRE: Tong with a model of the Tropicana Mall

The company recently took out a RM120 million bridging loan to finance the three-storey shopping centre Tropicana Mall, which is part of the Tropicana City development that includes a 601-unit apartment and a 12-storey office tower.

According to Dijaya's latest annual report, the book value for the 207ha agricultural freehold land in Behrang is RM13 million.

"We bought the land in 1995. Today, its market value should be between RM23 million and RM25 million," Tong said.

Covering 3.6ha, the Tropicana City development is located at the intersection of the Sprint Expressway and Lebuhraya Damansara Puchong. Located in SS2, it borders Section 17, Damansara Kim, Damansara Utama and Damansara Jaya neighbourhoods.

"The slight delay in the construction of Tropicana Mall is due to the rising costs in building materials like steel bar and cement," Tong said. The original completion date was June this year, but it has now been pushed to September.

"Accessibility to Tropicana City is a priority and thus we are willing to spend RM15 million on the traffic dispersal flyover. All in, this development will have seven entry points and six exits," he said.

With 390,000 sq ft of net lettable space at the proposed Tropicana Mall, Dijaya has signed on 60 per cent of the retail space with committed tenants at rentals of between RM3 per sq ft and RM20 per sq ft.

Tong also said the company has sold 70 per cent of the 601 apartment units called The Tropics, with built-ups ranging between 600 sq ft and 1,300 sq ft.

"We are seeing good take-up at The Tropics among young professionals because of the convenience and comfort the Tropicana City offers," he said.

On the office tower, Tong said Dijaya had initially planned to sell the units but now finds it is more worthwhile to lease them.

"With 105,000 sq ft of net lettable space, we are looking at RM4.50 per sq ft rental," he said.

By New Straits Times (by Ooi Tee Ching)

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