Khind to diversify into property segment

PETALING JAYA: Khind Holdings Bhd plans to diversify into property development, property construction and property investment, following the acquisition of land in Setia Alam, Shah Alam, on which it plans to develop a RM150 million mixed-use development.
In a filing with Bursa Malaysia yesterday, Khind said it had initially acquired the land with the intention of developing it into a commercial office building, partly for its own use and partly to be rented out to third party tenants.
"Whilst considering the various designs and development plans of the new office building, as well as taking into account the market demand for offices in the vicinity, the board had also identified an opportunity for the group to maximise the utilisation of the land by incorporating a retail component together with service apartments in the development plan," it said.
The change in development plans will see Khind developing a mixed-use development as its maiden venture, resulting in a diversion of 25% or more of the net assets of the group to an operation which differs widely from the current operations.
The planned development is expected to contribute 25% or more of the net profits of the group, thus prompting it to seek approval from shareholders for the proposed diversification.
Khind is principally engaged in investment holding and the provision of management services. Its subsidiaries are mainly involved in the manufacture, distribution and sale of electrical home appliances, household goods and electrical products.
The group said its current head office at Bukit Jelutong, Shah Alam will not be sufficient to cater for its operations and on June 1, 2010 it signed a sale and purchase agreement with SP Setia Bhd to purchase 65,340 sq ft of freehold land for RM7.84 million.
The acquisition was completed on Dec 30, 2011 and the land was transferred to Khind's wholly-owned subsidiary Khind Properties Sdn Bhd on June 3, 2015.
The planned development comprises an eight-storey office wing with estimated net lettable area of 47,044 sq ft and a 17-storey apartment wing with 198 units of service apartments as well as a commercial floor with retail space, carpark and amenities.
It plans to retain a majority of the office space for its own use, as well as part of the commercial space while the remaining space will be rented out. The service apartments and a portion of the carpark bays will be available for sale.
The application for the development order was submitted on April 15, 2015 and the building plans will be submitted within three months after receiving the approval for the development order.
It expects to obtain all approvals from local authorities and shareholders by the first quarter of 2016 and construction, which will take three years, is expected to begin within a year after obtaining approvals.
Khind said it will fund the RM112.5 million gross development cost via a combination of bank borrowings, progressive sales billings and internally generated funds.
While continuing with its existing business, the group said it also intends to grow the new business segment into one of its future core businesses and has set up a key management team to manage the new business.
"The proposed diversification is intended to diversify its earnings base and provide a potential new source of revenue to the group and is expected to offer growth prospects for the group," it said.