Aeon to sell Mahkota Cheras shopping mall, land for RM87.8m

PETALING JAYA: Aeon Co (M) Bhd proposes to sell Aeon Mahkota Cheras Shopping Centre, together with the 28,328 sq m freehold land on which it sits, for RM87.8 million, to focus on developing its future retail business.
The group entered into a sale and purchase agreement with Foremost Wealth Management Sdn Bhd yesterday for the exercise.
The net book value of the property for the financial year ended Dec 31, 2016 is RM67.4 million and the building is seven years old.
“The proposed disposal is in line with Aeon’s corporate strategy of focusing on and developing its future retail business,” Aeon said yesterday.
Aeon said in its 2016 annual report that the group’s strategy is to maintain a good balance between pursuing growth and stability under the challenging environment. The group has reorganised and consolidated its development portfolio, exercising restraint and reviewing development plans.
Aeon aborted land acquisitions in Sungai Petani (Kedah) and Senawang (Negri Sembilan) last year, and most recently in Batu Pahat (Johor). It also terminated a tenancy agreement for a yet-to-be-built mall in the face of the challenging environment.
The proposed disposal is expected to give rise to an estimated gain of RM17 million after adjusting for expenses and taxes for the financial year ending Dec 31, 2017.
“The cash proceeds are intended to be used as working capital of the company and to reduce its borrowings,” Aeon said.
The exercise is not expected to have any material effect on net assets and gearing of the company.