YBS International buys the Perai factory it was renting for RM390,600 a month

YBS International Berhad's wholly owned subsidiary Oriental Fastech Manufacturing Sdn Bhd (OFM) has agreed to buy the Perai factory it already occupies, signing a sale and purchase agreement with Premium Starhill Sdn Bhd on 17 August 2026 for RM23.5 million in cash.

The property is No. 3078, Lorong Perusahaan 4, Kawasan Perusahaan Perai, 13600 Perai — held as Lot 10288 under Pajakan Negeri 11311, Mukim 1, Daerah Seberang Perai Tengah.

The deal in numbers

• Price: RM23,500,000, wholly in cash
• Land: about 87,059 sq ft (roughly two acres, or 8,088 sq m) — RM269.93 per sq ft of land
• Building: a semi-detached factory with 59,828 sq ft of built-up area (5,558.21 sq m) — RM392.79 per sq ft of built-up
• Tenure: 60-year leasehold expiring 21 November 2032, leaving about six years, with a provision in the title for a further 60-year term
• Valuation: Henry Butcher Malaysia (Penang) Sdn Bhd assessed the market value at RM23.5 million as at 31 July 2026, using the cost approach
• Payment: RM705,000 held back for real property gains tax plus RM1.645 million on signing; the RM21.15 million balance on or before 31 October 2026
• Funding: internal funds plus roughly RM19.9 million of bank borrowings

The number nobody did the arithmetic on

OFM is not a newcomer to 3078. It has been renting the factory from Premium Starhill since 1 June 2025, under a 17-month tenancy running to 31 October 2026 — at a monthly rent of RM390,600.

That is RM4.69 million a year, on a building now being bought for RM23.5 million. Put the two figures side by side and the rent OFM was paying works out to a gross yield of just under 20% on the purchase price. Owning the factory instead of renting it pays for itself in roughly five years of rent saved.

Over the full 17-month tenancy, OFM will have handed over RM6.64 million in rent — more than a quarter of what the property itself costs. The filing also confirms OFM stays liable for rent right up to 31 October 2026 even if the sale completes earlier.

On built-up area, RM390,600 a month works out to about RM6.53 per sq ft per month — far above what ready-built factory space in Seberang Perai normally commands. Read together with the dates (a tenancy agreement signed 20 December 2024, a supplemental agreement on 5 June 2025, and a purchase a year later), the arrangement looks less like an open-market lease than a structure that let OFM occupy and start producing while the purchase was worked out. That is a reading of the disclosed terms, not something YBS has stated.

The second half of a matched pair

This is not YBS's first move on this road. On 1 August 2025, OFM announced a proposed acquisition of the lot immediately next door — Lot 10287, No. 3077 Lorong Perusahaan 4, held under Pajakan Negeri 11310 — also for RM23.5 million cash.

Two adjoining lots, one year apart, at exactly the same price. Taken together they give OFM a contiguous stretch of roughly four acres on a single road in Kawasan Perusahaan Perai, next to the group's existing plants and supply chain. That is the real story here: not a one-off purchase, but a deliberate, staged assembly of a mainland manufacturing footprint.

Six years on the clock

The demanding part of this deal is the tenure. The lease expires on 21 November 2032. YBS is paying RM269.93 per sq ft of land for an interest with about six years left to run — a price that only makes sense on the expectation of renewal.

The title does carry a provision for a further 60-year term, but it is conditional: notice to the state authority, and a fresh premium and rent to be determined by that authority. The premium is not fixed in advance, and it is the buyer who carries that open-ended number.

The purchase is itself conditional on OFM obtaining consent from the Penang state authority and the Penang Development Corporation to transfer and register the property, within three months of the SPA date. If OFM misses the completion date, the vendor has agreed to a further two months at 8% per annum interest on the outstanding balance.

What it does to the balance sheet

YBS says the acquisition will not materially affect earnings or earnings per share for the financial year ending 31 March 2027. Net assets per share stay at RM0.55. Net debt rises from RM172.33 million to RM192.23 million, taking net gearing from 1.05 times to 1.17 times on FY2026 audited figures.

The highest applicable percentage ratio under Rule 10.02 of the ACE Market Listing Requirements is 14.32%. Completion is expected within three months of signing.

What this means for mainland industrial

Perai is being re-rated by users, not speculators. Both of these lots were bought by the company that actually runs machines in them, at valuations set by the cost approach rather than by comparable sales. That is demand from production, not from land banking.