Petaling Jaya, 23 July 2024 – Tropicana Corporation Berhad has announced a significant milestone in its strategic efforts to reduce gearing with the divestment of Tropicana Gardens Mall (TGM). The sale and purchase agreement (SPA) was signed between Tropicana Indah Sdn Bhd (TISB), an indirect 70%-owned subsidiary of Tropicana, and IOI Mall Damansara Sdn Bhd (IOI MD), a subsidiary of IOI Properties Group Berhad (IOIPG), for a total consideration of RM680 million.
This transaction aligns with Tropicana’s ongoing strategic initiatives to monetize low-yielding landbanks and investment properties. The proceeds from the sale will be utilized to substantially reduce the Group’s debt, improving cash flow and reducing interest expenses. The management highlighted, “This sale marks Tropicana’s efforts to maintain financial discipline and enhance our financial stability.”
In addition to the TGM sale, Tropicana has also divested two other investment assets, W KL Hotel and Courtyard by Marriott Penang, to IOIPG for a total of RM435 million. These transactions bring the total deal value with IOIPG to over RM1.1 billion. As a result, the Group’s pro forma gearing ratio is expected to decrease from 0.54 times (as of 31 December 2023) to 0.39 times.
Tropicana Gardens Mall, which opened in 2020, is strategically located at the intersection of Kota Damansara and Tropicana Indah. The 7-storey mall features direct connectivity to Surian MRT Station and boasts a substantial 1.05 million sq ft of net floor area. Recently, TGM also received Green Building Index (GBI) certification, underscoring Tropicana’s commitment to ESG best practices.
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For the financial period ending 31 March 2024, Tropicana reported a revenue of RM291.3 million, reflecting a 13.5% increase compared to the same period the previous year. The Group’s profit before tax (PBT) also surged to RM22.3 million in Q1 2024 from RM0.8 million in Q1 2023.
Looking forward, Tropicana plans to roll out exciting residential and commercial developments across Malaysia with an estimated gross development value (GDV) of RM4 billion. Upcoming projects include Varia Shop Offices at Tropicana Aman, Avisa Terrace Homes at Tropicana Alam, and Serviced Residences & Retail Shoppes at Lido Waterfront Boulevard.
Additionally, Tropicana is set to deliver vacant possession of six developments in FY2024, including SouthPlace Residences at Tropicana Metropark and Tropicana Miyu Condominiums.
The Group possesses a substantial landbank of 1,842 acres with an estimated GDV of RM120 billion, positioning it well for sustainable performance in the coming years. With strategic landbanks across Klang Valley, Johor, and Genting Highlands, Tropicana is poised to maintain its market presence and support future earnings.
“Our mission is to transform Tropicana into a future-ready property group with sustainable growth at its core, centered around our development DNAs and ESG commitments. We have strategic divestment plans that we are confident of achieving,” emphasized the management.
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