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Heng Huat may build industrial and commercial properties as its first real estate venture

Published: Thursday, 28 October 2021
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Heng Huat Resources Group Bhd plans to construct industrial buildings or a combination of commercial and industrial assets on several lots of land it is acquiring in Kulim, Kedah, as its first foray into property development.

It may also build a dormitory for a centralised accommodation centre on the aforementioned land, according to a stock exchange filing yesterday.

The dormitory, industrial buildings, or commercial assets, according to Heng Huat, would complement the developments and workers in and around the Kulim High-Tech Park, it said.

It has not, however, decided on the type of development to be carried out on the Kulim land, according to the filing.

Heng Huat, which manufactures and trades biomass material, announced plans to diversify into property development and a series of acquisitions.

It stated that the proposed diversification was undertaken to facilitate Heng Huat's plans to diversify its earnings base through the proposed Kulim land acquisition through the property development business.

The group intends to acquire 133 lots of leasehold land in Kulim for RM27 million and two parcels of freehold land in Penang for RM260,000 in cash through its subsidiaries.

Fibre Star (M) Sdn Bhd, its wholly-owned subsidiary, is also proposing to pay RM13 million for two parcels of leasehold land in Seberang Perai that currently house a warehouse, office, and store with ancillary buildings from Heng Huat Furniture Sdn Bhd.

Heng Huat also announced a proposed RM28 million acquisition of 1.02 million shares, or a 51 per cent stake in MG Furniture Sdn Bhd, which manufactures and sells furniture specialising in bedding sets.

"Following the acquisition of MG Furniture, Heng Huat intends to expand its marketing, distribution, and customer coverage to developed countries with growth opportunities in the export market for the custom-made furniture that MG Furniture currently serves," it said.

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