Nestcon Bhd has proposed to acquire three parcels of land in Johor Bahru for RM95 million, as part of its strategic move to diversify into property development beyond its core construction and renewable energy businesses.
In a Bursa Malaysia filing, the group said the acquisition will be carried out by its 70%-owned subsidiary, Nestcon Iskandar Puteri Sdn Bhd. The deal involves three freehold land parcels located in Mukim Pulai, with a combined area of 8.348 acres, translating to an implied price of RM261.26 per sq ft.
The vendor for the land is KLG Iskandar Puteri Sdn Bhd, which is owned by Chong Ngun Kin and Lee Siang Huat.
Nestcon plans to develop the site into a mixed commercial and residential project, comprising serviced apartments and retail units to be executed in two phases. The development is expected to generate a gross development value (GDV) of RM1.37 billion, with an estimated gross development cost of RM1.03 billion, resulting in a projected gross development profit of RM336.97 million.
The acquisition will be funded through a combination of internally generated funds and bank borrowings, with the exact financing structure to be finalised at a later stage.
The group said the move marks its entry into property development as a new core business segment, alongside its existing building and infrastructure, as well as renewable energy divisions.
Currently, Nestcon’s building and infrastructure segment remains its primary earnings driver, contributing approximately 98% of its net profit of RM11.5 million on revenue of RM723.8 million for the financial year ended Dec 31, 2025.
The proposed diversification is expected to contribute at least 25% to the group’s future net profit or net assets, subject to shareholders’ approval at an extraordinary general meeting.
The acquisition is targeted for completion in the second half of 2026.
Nestcon’s board said the proposal is aimed at reducing reliance on its existing business segments while enhancing long-term growth prospects.
As at Friday’s midday break, Nestcon shares were unchanged at 34 sen, giving the group a market capitalisation of RM264.87 million. Over the past year, the stock has declined by 11.7%.
