Tropicana Steps Up Divestments With Mall Sale

Tropicana Steps Up Divestments With Mall Sale – In line with the Group’s efforts to reduce gearing

● Tropicana Indah Sdn Bhd signed a sale & purchase agreement with IOI Mall Damansara Sdn  Bhd for the sale of Tropicana Gardens Mall for a total consideration of RM680 million.

● The disposal will assist with loan redemption, thereby reducing its net gearing and enabling the  Group to monetise its investment property. 

● The Group’s unbilled sales stood at RM2.4 billion with pro forma gearing ratio expected to  decrease from 0.54 times (as of 31 December 2023) to 0.39 times. 

Tropicana Indah Sdn Bhd (“TISB”), an indirect 70%-owned  subsidiary of Tropicana Corporation Berhad (“Tropicana” or “Group”), has signed a sale & purchase agreement (“SPA”) with IOI Mall Damansara Sdn Bhd (“IOI MD”), a wholly-owned  subsidiary of IOI Properties Group Berhad (“IOIPG”), for the sale of Tropicana Gardens Mall  (“TGM”) for a total consideration of RM680 million. This disposal will enable the monetisation  of Tropicana’s investment property. The proceeds from the sale will be used to substantially  reduce the Group’s debt, thereby improving the cash flow position and reducing interest  expenses. This transaction aligns with the Group’s ongoing strategic initiatives to monetise its  low-yielding landbanks and investment properties, providing the financial flexibility necessary  to support future growth. 

In addition to TGM disposal, the Group has also sold two other investment assets – W KL Hotel  and Courtyard by Marriott Penang – to IOIPG for a total consideration of RM435 million. Including TGM, the total transaction value with IOPG is in excess of RM1.1 billion. As a result  of these disposals, the Tropicana Group’s pro forma gearing ratio is expected to decrease from  0.54 times (as of 31 December 2023) to 0.39 times. With the ongoing disposal initiatives, the  Group’s gearing will continue to decline, and its financial position will strengthen. 

The management cited, “This year, the Group reported a string of positive news, from its successful sukuk redemption, higher revenue jump to multiple award triumphs. We are  confident that the Group will continue to strengthen its market presence and contribute to its  future earnings supported by high unbilled sales of RM2.4 billion and strong take-up for  ongoing projects. This sale also marks Tropicana’s efforts to maintain financial discipline and  enhance our financial stability. With substantial strategic landbanks across Klang Valley, Johor,  and Genting Highlands, Tropicana has the flexibility to reposition its asset and debt portfolios  effectively.”

 “Our mission is to transform Tropicana into a future-ready property group with a strong  purpose of sustainable growth, centred around our development DNAs and ESG  commitments. We have strategic divestment plans that we are confident of achieving and will  continue to roll out effective sales campaigns to drive growth, especially emphasising our  digital and online initiatives and customer-centric engagements,” the management  emphasised.  

Opened its doors in 2020, Tropicana Gardens Mall is a popular neighbourhood mall  strategically located at the Kota Damansara and Tropicana Indah intersection. This 7-storey  mall features direct connectivity to Surian MRT Station as well as a sizeable 1.05 million sq ft  of net floor area. Recently, the Mall also received green building certification (GBI),  demonstrating its strong commitment to ESG best practices. 

“For the financial period ended 31 March 2024, we reported a revenue of RM291.3 million  which was RM34.5 million or 13.5% higher when compared to the corresponding quarter in  the preceding year. The Group’s profit before tax (“PBT”) has also increased to RM22.3 million  in Q1 2024, compared to a PBT of RM0.8 million in Q1 2023. To spur growth, we plan to roll  out exciting residential or commercial developments across Malaysia, with an estimated GDV  of RM4 billion. We expect our financial position to strengthen with the upcoming handover of  6 vacant possessions this year from Tropicana Aman, Tropicana Miyu, Tropicana Metropark,  and Tropicana Uplands.” the management emphasised. 

Tropicana will continue to gain traction in the market with these 6 signature developments  worth an estimated GDV of RM4 billion: 

1. Varia Shop Offices, Tropicana Aman @ Kota Kemuning 

2. Avisa Terrace Homes, Tropicana Alam @ Puncak Alam  

3. Serviced Residences & Retail Shoppes, Lido Waterfront Boulevard @ Johor 4. Fraser Heights Terrace Homes, Tropicana Uplands @ Johor 

5. Breez Hill Serviced Residences, Tropicana Avalon @ Tropicana WindCity, Genting  Highlands  

6. Beachwalk Shoppes, Tropicana Cenang @ Langkawi

Adding more positive news, there is the delivery of the Vacant Possession of 6 developments  in FY2024: 

1. SouthPlace Residences, Tropicana Metropark @ Subang Jaya 

2. Tropicana Miyu Condominiums @ Petaling Jaya 

3. Freesia Residences, Tropicana Aman @ Kota Kemuning 

4. Gemala Residences, Tropicana Aman @ Kota Kemuning 

5. Hana Residences, Tropicana Aman @ Kota Kemuning 

6. Aster Heights Terrace Homes, Tropicana Uplands @ Johor 

Tropicana possesses a sizeable landbank of 1,842 acres with an estimated GDV of RM120  billion, placing the Group in a good position to deliver sustainable performance in the next  few years. 

Tropicana has a sizeable landbank in the booming Johor market. One of its star  developments is the vibrant Lido Waterfront Boulevard fronting the beautiful straits of Johor 

Tropicana Avalon is poised to be the next commercial hub in Genting Highlands, offering  stylish residences and retail shops in Gohtong Jaya

With the successful launch of SouthPlace Residences recording a high 95% take-up,  Tropicana rolled out SouthPlace 2 Shoppes & Residences fronting the sprawling 9.2-acre  urban park at Tropicana Metropark 

Recently Tropicana inked a tenancy signing agreement with 6 key tenants at SouthPlace  Shoppes, Tropicana Metropark and adding more vibrancy to the Subang community 

Avisa Residences at Tropicana Alam is picturesque and idyllic making it the perfect location  for family life

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