“Tropicana Corp sells Tropicana Gardens Mall, W KL Hotel, and Courtyard by Marriott Penang to IOI Properties for RM1.1 billion, reducing debt and strengthening financial stability.”
Kuala Lumpur, 24th July 2024, 13.48pm – Tropicana Indah Sdn Bhd, a 70%-owned subsidiary of Tropicana Corporation Bhd, has entered into a sale and purchase agreement with IOI Mall Damansara Sdn Bhd, a subsidiary of IOI Properties Group Bhd, to sell Tropicana Gardens Mall for RM680 million.
In a media release, Tropicana Corp stated that the proceeds from the sale will be used to significantly reduce the group’s debt, enhancing cash flow and lowering interest expenses. This move aligns with the group’s strategic efforts to monetize low-yielding land and investment properties, providing the financial flexibility needed for future growth.
Besides selling Tropicana Gardens Mall, Tropicana Corp has also divested two other investment assets—W KL Hotel and Courtyard by Marriott Penang—to IOI Properties for RM435 million.
Including Tropicana Gardens Mall, the total transaction value with IOI Properties exceeds RM1.1 billion.
As a result of these sales, Tropicana Group’s pro forma gearing ratio is expected to decrease from 0.54 times (as of Dec 31, 2023) to 0.39 times. “With ongoing disposal initiatives, the group’s gearing will continue to decrease, further strengthening its financial position,” stated Tropicana Corp.
“This year, the group has seen several positive developments, including successful sukuk redemption, higher revenue growth, and multiple award wins. We are confident that the group will continue to enhance its market presence and future earnings, supported by high unbilled sales of RM2.4 billion and strong demand for ongoing projects. This sale underscores Tropicana’s commitment to maintaining financial discipline and improving financial stability. With significant strategic landbanks in Klang Valley, Johor, and Genting Highlands, Tropicana can effectively reposition its asset and debt portfolios,” stated Tropicana Corp’s management.
“Our mission is to transform Tropicana into a future-ready property group focused on sustainable growth, guided by our development DNAs and ESG commitments. We have strategic divestment plans that we are confident of achieving and will continue to implement effective sales campaigns to drive growth, especially through digital and online initiatives and customer-centric engagements,” they added.
Tropicana Gardens Mall, which opened in 2020, is a popular local mall strategically situated at the intersection of Kota Damansara and Tropicana Indah. This seven-story mall boasts direct access to the Surian MRT Station and offers a substantial 1.05 million square feet of net floor area. Recently, the mall achieved Green Building Index (GBI) certification, highlighting its dedication to ESG best practices.
“For the financial period ending March 31, 2024, we reported revenue of RM291.3 million, an increase of RM34.5 million or 13.5% compared to the same quarter in the previous year. Additionally, the group’s profit before tax (PBT) rose to RM22.3 million in the first quarter of 2024, up from RM0.8 million in the first quarter of 2023.”
“To drive growth, we intend to launch exciting residential and commercial developments throughout Malaysia, with an estimated gross development value (GDV) of RM4 billion. We anticipate our financial position will improve with the upcoming handover of six properties this year from Tropicana Aman, Tropicana Miyu, Tropicana Metropark, and Tropicana Uplands,” stated Tropicana Corp.
