PETALING JAYA (June 15): Encorp Bhd is confident of its integrated township development project in Bukit Katil, Melaka, in spite of the soft property market.

Its chairman Tan Sri Isa Samad said the project will be a strategically placed development. The project is on 259.4 hectares of land, which is one of the largest parcel available in Melaka now.

"That is the only land available there. To us, it is very good. It is a very strategic place," he told reporters after the company's annual general meeting and extraordinary general meeting here.

"We are quite confident. All the consultants also said this is a good project," he added.

Asked on why Encorp decided to buy the land from Federal Land Development Authority (Felda), Isa explained that Encorp was not able to develop the tract when it was owned by Felda previously.

"The land belongs to Felda, we cannot develop," he said.

In January, Encorp paid RM583.6 million cash for the development rights of the land. The amount would be settled through a deferred payment scheme that spreads over 13 years.

"Encorp belongs to Felda. Not much difference. It is just from left pocket to right pocket," he added.

The 259.4 hectares of leasehold land belongs to Felda, which holds a 70.97% equity stake in Encorp through Felda Investment Corporation Sdn Bhd.

The property project would be developed in three phases with a mixture of residential and commercial properties built in an 80:20 ratio. It is expected to start in the third quarter of next year.

The first phase of the project is expected to be completed in two years, Isa said.

The gross development value of the project was initially pegged at RM4.9 billion, but was cut down to RM3.2 billion in view of the current slowdown in the property market.

Encorp closed 1.5 sen or 2.24% lower at 65.5 sen today for a market capitalisation of RM182.26 million.