PETALING JAYA (July 8) – Chin Hin Group Property Bhd (CHGP) has taken a major step in expanding its premium property portfolio with the proposed acquisition of a freehold commercial site along Jalan Sultan Ismail in Kuala Lumpur's Golden Triangle for RM455 million. The acquisition marks the company's largest land purchase to date and paves the way for a landmark mixed-use development with an estimated gross development value (GDV) of RM3.6 billion.
The proposed transaction, announced via Bursa Malaysia, involves CHGP's indirect subsidiary, Chin Hin Property (JSI) Sdn Bhd (CHPJSI), acquiring the land from YNH Land Sdn Bhd, a wholly owned subsidiary of YNH Property Bhd. Due to the transaction's size, representing approximately 83.8% of CHGP's net assets, shareholder approval will be required before completion.
Strategic Acquisition in Kuala Lumpur's Golden Triangle
The freehold parcel is located along Jalan Sultan Ismail, directly opposite the Concorde Hotel Kuala Lumpur, one of the city's most established commercial and hospitality corridors.
The site offers:
- Freehold tenure.
- Land area of approximately 10,564 square metres.
- Existing commercial land status.
- Independent market valuation of RM500 million, while CHGP is acquiring it at RM455 million, representing roughly a 9% discount to market value.
The acquisition strengthens CHGP's presence within Kuala Lumpur's city centre, where freehold development opportunities remain limited and highly sought after.
Mixed-Use Development with RM3.6 Billion GDV
CHGP plans to transform the site into a high-density integrated development comprising:
- Serviced apartments.
- Hotel.
- Retail components.
The project will leverage an approved plot ratio of 15.99, allowing for a substantial development scale while maintaining flexibility to amend the development order to better suit CHGP's product strategy.
Based on preliminary estimates:
- Gross Development Value (GDV): RM3.6 billion
- Gross Development Cost (GDC): RM2.7 billion
- Expected launch: Second Quarter 2027
- Target completion: Second Quarter 2034
The long development timeline reflects the scale and complexity of delivering a flagship mixed-use project in Kuala Lumpur's prime commercial district.
Flexible Payment Structure Reduces Immediate Cash Outflow
Rather than paying the entire purchase price in cash, CHGP has structured the acquisition using a combination of cash and equity instruments.
The RM455 million consideration consists of:
- RM409.5 million cash payment.
- RM45.5 million through redeemable preference shares (RPS).
- 25,000 new ordinary shares in CHPJSI issued to YNH Land.
This structure allows YNH Property to retain a minority interest in the project while enabling CHGP to preserve part of its capital for future development.
Following completion, CHPJSI's shareholding will comprise:
- BKG Development – 60%
- EC Properties – 30%
- YNH Land – 10%
YNH Land will also own all redeemable preference shares issued under the transaction.
Financing Strategy
The acquisition will be financed through a combination of shareholder funding and bank borrowings:
- RM91 million shareholder loan from EC Properties.
- RM318.5 million term loan secured by CHPJSI.
- RM45.5 million through issuance of redeemable preference shares.
Additional bridging financing is expected to fund construction costs during project implementation.
As a result, CHGP's borrowings will increase significantly.
Pro forma figures indicate:
- Total borrowings rising from approximately RM357 million to RM676 million.
- Gearing increasing from 0.66 times to 1.25 times.
- Net gearing rising from 0.53 times to 1.12 times.
Although leverage increases, the company believes the long-term development value justifies the additional financing.
Development Potential Supported by Existing Approvals
The land already benefits from an existing Development Order (DO) that permits a mixed-use scheme comprising:
- Serviced apartments.
- Hotel.
- SOHO units.
- Office space.
- Commercial components.
CHGP intends to submit amendments during the third quarter of 2026 to optimise the product mix while maintaining the approved plot ratio.
The company has also secured a limited power of attorney from YNH Land, allowing planning applications to proceed before legal completion of the acquisition.
Risks and Key Considerations
Like any large-scale development, the project carries several risks, including:
- Delays in obtaining regulatory approvals.
- Rising financing costs due to interest rate movements.
- Long development timeline extending to 2034.
- Market demand for premium residential and hospitality products upon launch.
Nevertheless, the strategic location, freehold tenure and integrated development concept provide strong long-term value creation potential.
Why This Acquisition Matters
This transaction significantly enhances CHGP's landbank within Greater Kuala Lumpur and demonstrates its growing ambition to undertake large-scale city-centre developments.
For YNH Property, the transaction unlocks the value of a mature asset while retaining future participation through its equity stake and redeemable preference shares.
For the broader property market, the acquisition reflects continued confidence in premium Kuala Lumpur developments despite a cautious economic environment. Prime freehold land within the Golden Triangle remains scarce, making strategically located sites increasingly valuable for developers targeting high-end mixed-use projects.
What I Learned
Several important insights emerge from this acquisition:
- CHGP is moving beyond suburban developments into premium Kuala Lumpur city-centre projects.
- Purchasing the land below its independent valuation provides an attractive entry point and potential upside.
- The RM3.6 billion GDV highlights management's confidence in long-term demand for integrated developments within the Golden Triangle.
- Using redeemable preference shares alongside debt financing reduces immediate cash requirements while allowing the seller to retain project participation.
- Although gearing will increase substantially, successful execution could generate significant long-term returns given the scarcity of freehold land in Kuala Lumpur's prime commercial district.
- The project reinforces the continued appeal of transit-accessible, mixed-use developments that combine residential, hospitality and retail components in established urban locations.
- Investors will closely monitor future product positioning, launch pricing, financing execution and the company's ability to manage development risks throughout the multi-year project lifecycle.
