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PETALING JAYA (April 1): Magna Prima Bhd is moving to regain control of a 4.58-acre portion of its 20-acre Shah Alam landbank, committing RM45 million to a sale and purchase agreement (SPA) that realigns a joint venture (JV) originally expected to deliver RM160 million in total deleveraging proceeds.
According to filings to Bursa Malaysia last Friday (March 27) and recent company clarifications, the JV agreement remains in full force and effect. However, the transaction reflects a change in the structure of the arrangement, with Twinicon (M) Sdn Bhd (a subsidiary of Magna Prima) reasserting direct control over the subdivided plot via an SPA with OCR Avenue Sdn Bhd.
Strategic Shah Alam site retained amid logistics-driven demand
The site’s proximity to the Federal Highway and the Lebuhraya Kemuning–Shah Alam (LKSA) underpins its strategic relevance. The broader 20-acre parcel remains earmarked for a potential integrated e-commerce logistics hub with an estimated GDV of RM1.5 billion.
Located within the tightly held Section 15 industrial-commercial district, the land sits within a constrained supply corridor where logistics-linked assets continue to command steady demand.
JV realigned: From RM160m expectation to RM45m commitment
Signed in April 2022, the JV positioned OCR Avenue as the developer and Magna Prima as the landowner. Under the original framework, Magna Prima was expected to receive at least RM160 million — including RM80 million upfront — to address going-concern requirements flagged in FY2021.
While the JV remains subsisting and key conditions precedent were fulfilled as of Dec 20, 2022 (following a mutual waiver of one condition), as stated in the companies’ replies to Bursa Malaysia’s query letters dated March 27, the site has remained undeveloped to date. The current RM45 million transaction allows for a partial realignment of interests within the subsisting JV framework.
OCR benchmarks disposal against May 2025 valuation
OCR Avenue is exiting its interest in the 4.58-acre subdivided parcel for RM45 million.
*Implied price: RM225.56 psf
*Valuation benchmark: Independent valuation (May 2025) at RM230 psf
The transaction results in liquidity for OCR Avenue and a transfer of the sub-plot to Twinicon (M) Sdn Bhd, with the consideration benchmarked slightly below the 2025 market appraisal.
Magna Prima moves to regain control, with funding implications
For Magna Prima, the transaction represents a shift in capital allocation. Instead of receiving the anticipated inflows under the early JV stages, the group — via Twinicon (M) Sdn Bhd — is now funding the RM45 million acquisition to secure the 4.58-acre portion.
Key implications of the realignment include:
*Purchase price reflects a 22.8% premium to 2022 JV benchmarks, while aligning with the May 2025 valuation
*Funding via a mix of bank borrowings and internal funds
*The company has indicated that the acquisition is expected to affect gearing
Four years on, site remains undeveloped
Despite the subsisting status of the JV, the 20-acre site remains vacant four years after the initial agreement was signed. The current transaction effectively reshuffles the project’s internal mechanics:
*OCR Avenue realises proceeds from the disposal of the sub-plot
*Magna Prima assumes direct control — and the associated development responsibility — for the 4.58-acre portion
Update and clarification: This article has been updated to reflect clarifications from OCR Group Bhd regarding the status of the joint venture agreement, fulfilment of conditions precedent, purchaser details and valuation benchmarks referenced in the transaction.
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