YNH Property expects RM105m profit from Bangsar South residential JV

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• The project, tentatively named Residensi Bangsar South, will feature 374 residential units on a 7,235-square-metre parcel of land owned by Genland.

KUALA LUMPUR (Oct 7): YNH Property Bhd (KL:YNH) expects to book an estimated profit of RM105 million from the residential project in Bangsar South that it is planning to jointly develop with Genland Sdn Bhd.

The group said in a bourse filing Tuesday, in response to queries from Bursa Malaysia, that this profit is its entitlement under the joint venture, and will be received in stages as the company remains involved in the project's development.

The project, tentatively named Residensi Bangsar South, will feature 374 residential units on a 7,235-square-metre parcel of land owned by Genland. Genland is primarily controlled by Sima Ventures Sdn Bhd, which holds a 90.91% stake, with Datuk Gan Seng Biang holding the remaining 9.09%.

YNH Property, who originally owned the parcel of land for the project, said it had sold the land to Genland for RM26.75 million to settle an outstanding bank loan.

This disposal resulted in a RM9.7 million loss for YNH, as it acquired the land in 2012 for RM36.4 million. Prior to the sale, part of the parcel had been compulsorily acquired by the Malaysian Highway Authority, for which YNH Property received RM3.14 million in compensation.

An independent valuation conducted by Azmi & Co (Perak) Sdn Bhd in August 2023 placed the land’s market value at RM22.6 million.

“The landowner’s entitlement was set at 18% of the project’s GDV (gross development value of RM408.2 million) excluding low-cost units, while the JV provides for a minimum entitlement of RM60 million, or 14.7% of the GDV, as a performance guarantee,” said YNH Property in its bourse filing.

The joint venture was announced last week after YNH Property cancelled a separate JV with Chin Hin Group Property Bhd (KL:CHGP) for another major residential project in Kuala Lumpur, as it opted to sell the 6.49-acre Segambut land earmarked for that project to Chin Hin for RM52 million instead.

Following the announcement, Bursa asked for further details about the project, including the rationale for selling the land to Genland instead of keeping it for its own development, and whether the land was independently valued before that.

As of end-June, YNH reported cash and short-term deposits of RM31.44 million against total borrowings and lease liabilities of RM571.11 million. This resulted in a net debt of RM539.7 million and a net gearing ratio of about 0.83 times.

Shares of YNH closed unchanged at 29.5 sen on Tuesday, giving the group a market valuation of RM153.45 million.

As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.