Land & General’s Maiden Industrial Park Set to Transform Hulu Selangor

Land & General Bhd (KL:L&G) is preparing to launch its first-ever industrial park development on its 2,500-acre Sungai Jernih Estate in Kerling, Hulu Selangor, marking a major diversification move into Malaysia’s growing industrial property segment.

The launch of phase one is targeted for late 2026, and the entire project is expected to span more than a decade, underscoring both the scale of the development and L&G’s long-term confidence in Malaysia’s industrial property demand.

From Plantation to Industrial Hub

Currently undergoing rezoning from agricultural to industrial use, Sungai Jernih Estate will become the flagship industrial park for L&G.

According to managing director Low Gay Teck, the project is still in its preliminary stages, but:

• The gross development value (GDV) is expected to be substantial.

• Land costs will be very low since the estate has been on L&G’s books for nearly 20 years.

• This translates to high profit margins and revenue potential once development begins.

The project reflects a growing trend of landed estates in Malaysia being repositioned for industrial use, particularly as demand rises for logistics hubs, warehousing, and manufacturing facilities near the Klang Valley.

FY2026: RM700 Million in New Launches

Beyond Sungai Jernih, L&G is targeting RM700 million in new property launches in its FY2026 pipeline.

• Unbilled sales currently stand at RM555 million, providing at least two years of earnings visibility.

• Most launches will focus on prime and mature housing areas, including Bandar Sri Damansara, Shah Alam U10, Ampang, and Mont’Kiara.

• These launches are largely residential projects, backed by demand from population growth and urban migration.

This balanced strategy — industrial expansion plus strong residential launches — highlights L&G’s effort to diversify revenue streams and de-risk its portfolio.

Land Bank Strength

Including Sungai Jernih, L&G’s total landbank stands at 2,815 acres, giving it one of the larger undeveloped holdings among mid-cap Malaysian developers.

Key assets include:

• 2,500 acres in Hulu Selangor (industrial focus).

• Other land parcels in urban and suburban areas for residential development.

This combination of urban housing projects and long-gestation industrial projects gives L&G both short-term earnings visibility and long-term growth potential.

Adaptive Strategy: Repurposing Assets

L&G is also demonstrating flexibility in responding to market realities.

• The group is converting an office tower in Putrajaya into serviced apartments at a cost of RM45 million.

• Reason: oversupply of office space in Putrajaya has created weaker rental prospects.

• Timeline: Conversion will take 12–15 months, with layout plans already approved.

This asset-light strategy ensures underutilised assets are repositioned to meet current market demand, which in Putrajaya leans more toward residential accommodation than office supply.

Financial Performance: Strong Momentum

L&G’s latest quarterly results show a group on an upward trajectory:

• 1QFY2025 Net Profit: RM11.4 million, more than double from RM4.1 million a year earlier.

• Revenue: RM98.56 million, up 160% from RM37.18 million.

• Property Division: Contribution soared nearly ninefold to RM18.7 million, driven by sales tripling to RM85.5 million.

This surge reflects:

• Strong property sales momentum.

• Contribution from its education division.

• Early benefits of a diversified strategy across property and other ventures.

Shares in L&G closed at 11.5 sen, giving the group a market capitalisation of RM342 million.

Why Industrial Property, Why Now?

The move into industrial property is strategic:

1. Rising Demand in Malaysia

Industrial property has become one of the most resilient asset classes in Malaysia, driven by:

• Growth of e-commerce and logistics hubs.

• Strong demand for warehousing and supply chain facilities.

• Increasing relocation of manufacturing bases into Malaysia due to regional trade dynamics.

2. Hulu Selangor Advantage

Located near Klang Valley but with more affordable land parcels, Hulu Selangor offers:

• Accessibility to major highways.

• Potential to become a logistics and industrial hub serving Kuala Lumpur and Selangor.

• Ample land for long-term master planning.

3. High Margin Potential

Since the Sungai Jernih land was acquired nearly 20 years ago, land costs are minimal. Any industrial development will generate significant profitability compared to new land acquisitions.

Risks & Considerations

• Rezoning Approval: Project timelines depend on smooth conversion from agricultural to industrial land use.

• Infrastructure Investment: Large-scale industrial parks require strong road, utility, and digital infrastructure, which may demand upfront capital.

• Market Cycles: Industrial demand is robust today, but developers must remain adaptive to shifts in global trade and local demand.

Still, with a long development horizon (10+ years), L&G has the flexibility to phase launches in line with market cycles.

Implications for KL Property Market

1. Diversification Among Developers
   L&G’s pivot to industrial shows how developers are hedging against residential market cycles. Others, such as Sunway and SP Setia, have also diversified portfolios into industrial and township developments.

2. Industrial Hubs Boost Surrounding Property
   As industrial parks take shape, surrounding residential and commercial property in Hulu Selangor may see spillover demand from workers and businesses.

3. Investor Appeal
   For property investors, exposure to industrial assets (directly or indirectly via developers like L&G) provides more stable returns compared to purely residential plays.

Conclusion

Land & General Bhd’s maiden industrial park in Hulu Selangor marks a bold expansion into Malaysia’s most resilient property segment. With 2,500 acres earmarked for industrial development, low land cost, and a 10-year horizon, the Sungai Jernih project is set to become a cornerstone of L&G’s future earnings.

Combined with RM700 million in upcoming residential launches and adaptive strategies such as repurposing assets in Putrajaya, L&G is positioning itself as a flexible, forward-looking developer with both short-term earnings visibility and long-term growth potential.

For Malaysia’s property market, this underscores a key trend: developers are no longer focusing only on housing, but increasingly on industrial, logistics, and diversified ventures that align with the country’s growth story.

As urban migration continues and industrial hubs expand, L&G’s Hulu Selangor industrial park could emerge as one of the defining developments of the next decade — delivering value to investors, communities, and Malaysia’s broader property landscape.