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Tuesday, March 24, 2009

Magna buys school land

Magna Prima plans to build commercial and residential properties worth RM1.3 billion on the land on which the Lai Meng Primary School and Lai Meng Kindergarten sits.

Magna Prima Bhd appears to have struck gold as it is buying a piece of prime land in Jalan Ampang, Kuala Lumpur, a stone's throw from the Petronas Twin Towers.

It will spend RM148.2 million to buy the land on which the 44-year-old Lai Meng Primary School and Lai Meng Kindergarten currently sits.

In its place, the company plans to build commercial and residential properties worth some RM1.3 billion, Magna Prima told Bursa Malaysia in a statement.

This would probably be the third time that a school in the city centre is giving way for redevelopment. In 2000, the Bukit Bintang Girls School was moved to make way for the Pavilion Kuala Lumpur, a shopping mall.

Eastern & Oriental Bhd and the Lion Group relocated St. Mary's School in Jalan Tengah/Jalan P. Ramlee to Selayang and work on the new project has started.

"The proposed acquisition also creates an opportunity for the group to venture into the high-end property market, seeing that land within the KLCC area available for development is scarce," Magna Prima said in its statement.

Magna Prima will buy the existing land of 10,587.5 sq m from the Lai Meng Girls School Association.

The purchase price, which is a quarter less than its market value, will be paid in cash and funded with internal funds, bank loans or through a joint venture with partners.

As part of the deal, Magna Prima will give another piece of land double the size of the existing property for the relocation of Lai Meng. The new land is in Bukit Jalil.

Magna Prima will design, arrange and organise the construction of the new school. However, it is unclear which party will bear the construction cost.

Its project in Jalan Ampang will only start when the new school is completed.

The development has an estimated gross floor area of 1.2 million sq ft and an estimated gross development value of up to RM1.3 billion.

The project, due to start in 2012, is scheduled for completion in 2015.

Shares of Magna Prima were not traded yesterday. The counter's last closing price was RM2.10.

By Business Times

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