WS-SK TARGET (08427) has announced that on June 12, 2026, the seller, Kien Heng Hong Ginseng Sdn. Bhd., accepted an offer from the buyer, Target Precast Industries Sdn. Bhd., a wholly-owned subsidiary of the company.
The agreement stipulates that the buyer will acquire the land for a consideration of MYR 24 million, with the seller consenting to the sale.
The property, located at No. 1894, Jalan Kpb 5, Kawasan Perindustrian Balakong, 43300 Seri Kembangan, Selangor, Malaysia, covers a total area of approximately 8,093.7 square meters.
This is a freehold land parcel designated for industrial use.
The buyer currently leases the land for an annual rent of about MYR 582,000 and has established a permanent production facility there, having already invested significant capital expenditure in the plant, machinery, infrastructure, and supporting facilities on the site.
The existing lease for the land is set to expire on January 31, 2027, leaving a remaining term of approximately eight months as of the announcement date.
The seller has indicated its intention to sell the land on the open market.
Should the buyer fail to renew the lease with any potential new purchaser of the land, it would be required to relocate its production plant to an alternative site.
This relocation would necessitate all preparatory work, including land leveling and obtaining all necessary approvals and licenses.
The relocation process is anticipated to take no less than 12 months and could significantly disrupt the group's production operations.
Potential impacts include loss of production capacity, delays in fulfilling customer orders, and substantial relocation costs.
Consequently, the board believes the acquisition will enable the group to secure a permanent production base.
This move provides greater operational certainty and control over production activities, thereby mitigating potential disruption from the termination or non-renewal of the existing lease.
The acquisition is also expected to reduce the group's long-term rental expenses and lower the risk of future rent increases.
Furthermore, owning strategic industrial property for its core business will strengthen the group's asset base.
Owning the land will offer the group additional flexibility to expand its production facilities and storage areas in the future, in line with its long-term business growth plans, subject to obtaining relevant approvals.
The group may also benefit from any potential capital appreciation of the land.
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