Wednesday, October 19, 2011

Bonia unit buys Cheras properties for RM44.29m

KUALA LUMPUR: BONIA CORPORATION BHD [] is acquiring PROPERTIES [] in Cheras for a total of RM44.29 million to facilitate its future expansion plans and to reduce rental expense.

It said on Wednesday, Oct 19 that its wholly owned subsidiary Luxury Parade Sdn Bhd had entered into 15 sale and purchase agreements with Platinum Starhill Sdn Bhd to acquire freehold units in two blocks in Cheras.

Bonia said the acquisition would be financed via internally generated funds and partly financed by bank borrowing.

On the rationale for the purchase, Bonia said that due its rapid expansion in the recent years, the company's current operational offices and warehouses were located around a few locations in the Cheras area.

It said this had hindered the logistic planning and efficiency of its overall operations, adding that some of its premises were rented from third parties with a monthly rental of approximately RM69,000.

Bonia said that with the expected rapid expansion in the coming years, it will need at least additional of 80,000 to 100,000 square feet of offices and warehouses space.

'With the acquisition of the properties, it will reduce the group's overall dependency on third parties' tenancy renewal, which is uncertain and subject to market fluctuation,' it said.

Bonia said the properties were strategically located near Kuala Lumpur City Centre and Klang Valley where most of its retail points were located, adding that it had excellent connectivity through an existing network of highways.

It also said the freehold development was close to the public transportation hub of Terminal Bersepadu Selatan-Bandar Tasik Selatan (TBS-BTS) and recently announced MRT project's Plaza Phoenix station, renowned university and other amenities.


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