KUALA LUMPUR (March 8): LBS Bina Group Bhd has teamed up with YPJ Plantations Sdn Bhd to jointly develop a mixed township in Kota Tinggi, Johor, with an estimated gross development value (GDV) of RM2.6 billion.

According to LBS Bina, the project fits into the group's property development strategy in enhancing its portfolio in township development and further strengthens its presence by allowing capitalisation of its branding in Johor.

The project will also allow the group to participate in a viable development project without having to bear the substantial upfront cost of acquiring land, it added.

In a filing with Bursa Malaysia today, LBS Bina said its indirect subsidiary Biz Bina Development Sdn Bhd (BBDSB) has entered into a joint development agreement (JDA) with landowner YPJ Plantations for the proposed development.

Measuring 541.4 acres, the land is located near townships such as Kulai, Senai, Kota Tinggi and Bandar Tenggara. It is about 46km from Johor Baru and 29km from Senai International Airport.

The land is also opposite the Orchard Golf & Country Resort and is nearby Kolej Yayasan Pelajaran Johor.

"Based on the initial plan, the mixed township will comprise residential and commercial units including Perumahan Rakyat Johor (and) will span over eight to 10 years," said LBS Bina.

Under the JDA, YPJ Plantations will be entitled to 7.5% of the GDV of the proposed development or minimum guaranteed sum of RM194.9 million. BBDSB, meanwhile, will be entitled to the whole sales proceeds from the project less the landowner's entitlement.

LBS Bina said the proposed development, which mainly targeted medium to medium-high income group, is expected to create greater economic value and positive earnings potential for the group in the medium to longer term.

"As the development is expected to commence in the near future, as such the JDA is not expected to contribute to the group's earnings for the current financial year ending Dec 31, 2017," it added.

Shares in LBS Bina closed at a five-year high of RM1.96 today, up 4 sen or 2.08% from yesterday, giving it a market capitalisation of RM1.28 billion. The counter saw 2.64 million shares change hands.