Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily, on September 14, 2016.


 

KUALA LUMPUR: LBS Bina Group Bhd has teamed up with the Selangor state government to jointly undertake a mixed development township in Ijok, Selangor, with an estimated gross development value (GDV) of RM3.43 billion.

The property developer said its unit Kemudi Ehsan Sdn Bhd, together with Worldwide Property Management Sdn Bhd, on Saturday entered into a development rights agreement with Menteri Besar Selangor Incorporated to accept the development rights for the development on 10 parcels of leasehold land in Ijok, collectively measuring 909.01 acres (367.86ha).

Worldwide Property Management is a wholly-owned subsidiary of Worldwide Holdings Bhd, which in turn is a wholly-owned subsidiary of Selangor State Development Corp.

According to LBS Bina’s bourse filing on Saturday, the 99-year leasehold development land, with leases expiring on Feb 15, 2111, is located in north-western Klang Valley.

The land is connected to established suburban centres, such as Kota Damansara, Shah Alam and Sungai Buloh, via major roads like Jalan Batu Arang, Persiaran Mokhtar Dahari, Jalan Meru Tambahan and Jalan Kuala Selangor, as well as existing highways, including the Kuala Lumpur–Kuala Selangor Expressway, North-South Expressway and Guthrie Corridor Expressway.

“Accessibility to the land is expected to be enhanced with new proposed expressways, including the DASH Highway (Damansara-Shah Alam Elevated Expressway) and West Coast Expressway,” it added.

“Part of the development land is charged to Malaysia Building Society Bhd (MBSB) as security for the loan granted by MBSB to PNSB Development Bhd,” the filing read.

According to LBS Bina, the township will comprise mostly landed residential units to be priced at an affordable range; Rumah SelangorKu units will also be included in the development plan.

Based on the preliminary plan, the estimated GDV (excluding Rumah SelangorKu units) to be generated from the land, to be developed over 12 years, is approximately RM3.43 billion.

The GDV (excluding Rumah SelangorKu units) of Kemudi Ehsan’s five parcels of land is RM1.83 billion; it is RM1.6 billion for the other five parcels under Worldwide Property Management.

LBS Bina said Kemudi Ehsan is now in the initial stages of planning and so can’t ascertain the expected cost required for the development. Nevertheless, it plans to finance the relevant cost with internal funds and/or bank borrowings.

Kemudi Ehsan on Aug 4 signed a conditional consortium agreement with Worldwide Holdings to set out all obligations, cost and liabilities that would arise from or in connection with the development land. Kemudi Ehsan will bear 53.33% of the cost, with the remaining 46.67% to be borne by Worldwide Holdings.

LBS Bina said the tie-up with the Selangor government fits in with its property development strategy to enlarge its land bank, particularly in the Klang Valley, for future development projects and to generate future revenue streams and enhance profitability.

Moreover, it said its record sales in the past two years were testimony to the success of its township developments in the Klang Valley, with affordably priced products. “About 85% of total sales of RM1.029 billion in 2015 were contributed by affordable products in [the] Klang Valley, mainly from BSP 21 in Bandar Saujana Putra and SkyVilla in D’ Island Residence.”

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