KUALA LUMPUR (July 17): Poh Huat Resources Holdings Bhd is buying a warehouse cum office showroom in Cranbourne West, Victoria, Australia for A$4.95 million.

Poh Huat said it intends to hold the property as investment for rental to third parties.

"The board is of the view that the property has good potential in terms of capital appreciation and rental yield, given the demographic and commercial potential of the Cranbourne area," it said in a filing with Bursa Malaysia.

Poh Huat noted prices of properties in Cranbourne have registered double-digit growth over the last five years and the strong population growth is leading to a significant requirement for employment land (land for industrial, retail and commercial/office use) across all industries and skill sets.

The filing said Poh Huat has entered into a sale and purchase agreement with JSNJ Investment Pty Ltd of Australia for the proposed acquisition.

The warehouse cum office showroom comprises a 2,912 sq m one-storey warehouse, with a 300 sq m office with retail/showroom facilities at the front of the property.

"The property, which is currently vacant, is suitable for a variety of uses, including commercial, retail, bulky goods, industrial and distribution facilities," Poh Huat said.

The group will fund the purchase consideration via internal funds.

Poh Huat had in September 2016, acquired a 3,122 sqm detached warehouse cum officeshowroom in South Dandenong, Victoria, Australia for A$4.25 million or about A$1,361 per sq m.

"The first warehouse has enjoyed value appreciation based on recent per sqm transacted prices of similar sized properties in South Dandenong of A$1,571 to A$1,654.

"The group is currently under negotiation for the leasing of the first warehouse to one of our existing customers for an annual net lease payment of between A$320,000 and A$340,000. This works out to be a potential net yield of 7.5% to 8% against our original costs of investment or 6.4% to 6.8% based on a potential market value of say A$5 million," the filing added.

Barring unforeseen circumstances, the acquisition is expected to be completed by next month.

Poh Huat shares closed down one sen or 0.77% at RM1.29 today, for a market capitalisation of RM283.68 million.