KUALA LUMPUR (May 9): Sunsuria Bhd has partnered with Taiwan-based Ever Rich Land Co Ltd to turn a 3.4ha land in Putrajaya South into a RM694 million theme-designed mixed development.

Confirming a report today in The Edge weekly, the property developer said its 99.99%-owned indirect subsidiary, Sunsuria City Sdn Bhd (SCSB), and 99.99%-owned direct subsidiary, Sunsuria Gateway Sdn Bhd (SGSB), have signed an agreement with one of Ever Rich's real estate investment arm, Welcome Global Co Ltd.

This is to facilitate the setting up of Sunsuria Everrich Sdn Bhd (SESB), which is 60% owned by the two Sunsuria units and 40% by Welcome Global, it said in a filing to Bursa Malaysia.

SCSB and SGSB are involved in property development and investment holding respectively, while Ever Rich is engaged in construction and project development and investments in Taiwan and South Korea.

The proposed joint venture would unlock the land's value, Sunsuria said, adding that the partnership with Ever Rich is expected to add value via the latter's expertise and technical know-how, particularly in the development and management of a mall and boutique hotel in the project.

Based on the agreement, landowner SCSB is entitled to Sunsuria's entitlement, which is equivalent to about RM125 million upon full development of the project, further strengthening its future earnings and cash flow.

"The estimated total gross development value of the project is approximately RM694 million. The estimated total gross development cost of the project has yet to be determined and shall be finalised at a later stage," said Sunsuria.

It added that the project is expected to be transformed into a new future one-stop tourist landmark in Selangor complete with service apartments, retail shops, mall and boutique hotel.

Sunsuria said the land, which is currently charged to Public Bank Bhd, has a net book value of RM33.62 million based on its latest consolidated audited financial statements as at Sept 30, 2015.

It is situated within Sunsuria City, Sunsuria's flagship integrated township development spanning more than 212.5ha in Salak Tinggi, Putrajaya South, that is home to Xiamen University Malaysia Campus.

Sunsuria City is also a transit-oriented development that is directly accessible through the dedicated ELITE Expressway interchange and the Express Rail Link.

The deal involves the development into a theme-designed mixed development made up of serviced apartments, retail shops, mall and boutique hotel.

SCSB and SGSB's portions of investment in SESB will be funded through the group's internally generated funds.

Sunsuria said the application for planning approval is targeted to be submitted by the second half of 2016.

"The development of the project is targeted to commence in 2017 and to be completed by 2023," it said.

Sunsuria's share price was up one sen or 1.2% at 84.5 sen at the midday break with 31,200 units traded for a market capitalisation of RM675 million.