KUALA LUMPUR: Main-market listed PGF Capital Bhd's indirect joint venture company Nexel Development KHTP Sdn Bhd has entered into a sale and purchase agreement to acquire two parcels of freehold land in Kulim Hi-Tech Park, Kedah from Kulim Technology Park Corporation Sdn Bhd for RM12.7 million.

Nexel Development is a wholly-owned subsidiary of Nexel Group Sdn Bhd, a joint venture company in which PGF Capital holds a 50.1 per cent stake alongside Penang-based property developer Malvest Group Sdn Bhd with a 10.0 per cent stake, and three individuals affiliated with Malvest holding the remaining shares.

PGF Capital said the acquisition will be for a mixed-use development with a gross development value of RM600 million on the land comprising condominium, hotel, serviced residence and several commercial elements.

The proposed hotel aims to cater to business travellers visiting the tech hub, and Nexel Group is in discussions with a few international brands to operate it," added the company.

PGF Capital executive director and group chief executive officer Fong Wern Sheng said the acquisition was a strategic move for the company's property development division as Kulim Hi-Tech Park is set to expand further.

"This will certainly create significant demand for both housing and commercial spaces as well," he said in a statement today.

PGF Capital said the purchase consideration for the land was arrived at on a willing buyer, willing seller basis, taking into consideration the planned project, and shall be funded via a combination of internally generated funds and bank borrowings, in accordance with PGF's 50.1 per cent stake in Nexel Development.

"The proposed land acquisition exercise is slated for completion by early 2026, with the project to be developed in three phases over a six-year period thereafter," it said.

PGF Capital said the high-tech (high-technology) hub drew strong interest from multinational companies (MNCs) given its strategic location and connectivity with easy access to major ports and proximity to Penang, alongside its established infrastructure and ecosystem for high-tech industries.

Additionally, external factors such as trade diversion and the China+1 strategy were prompting MNCs to consider investments in industrial hubs like Kulim Hi-Tech Park.

Fong said that with the rising industrial activities naturally leading to a greater population, the group sees there is currently a shortage of housing options in the area, particularly offerings tailored towards the needs of a skilled workforce, including expatriates.

"Together with our partner, Malvest, the project will not only add valuable housing options but will also serve as a catalyst for business and leisure, strengthening Kulim Hi-Tech Park's status as a high-tech economic hub.

"We target to launch the project in early 2026 upon receipt of regulatory approvals,"he added.