KUALA LUMPUR (April 21): Property developers OCR Group Bhd and Magna Prima Bhd are joining hands to develop an integrated e-commerce logistics hub with a planned gross development value of RM1.5 billion, which the partners plan to launch in phases from 2023.
In a statement, OCR said the joint venture will be undertaken with Magna Prima's 70%-owned unit Magna Ecocity Sdn Bhd, who owns a 20-acre leasehold plot in Section 15, Shah Alam, Selangor.
Under the agreement, OCR's wholly-owned OCR Avenue Sdn Bhd will be the project developer. The proposed joint venture will involve a profit-sharing scheme that will require OCR Avenue to pay RM160 million as minimum entitlement or 30% of the development profit — whichever is higher — to Magna Ecocity, upon fulfilment of certain conditions.
OCR plans to finance the proposed development, which is still in the planning stage, through a mixture of internal funds and external borrowings.
"With a planned GDV of RM1.5 billion, the proposed integrated e-commerce logistics hub is set to be OCR’s biggest venture into the CRE (commercial real estate) segment to date. The proposed development will comprise a mixture of retail and commercial spaces, including multi-storey integrated e-commerce spaces specifically targeted for small and medium-sized enterprises (SMEs), as well as serviced apartments," OCR said.
The site's strategic location is expected to appeal to SMEs, according to OCR, as it is located within the vicinity of commercial and light industrial areas in Shah Alam, with easy access to major highways and ports, as well as important amenities and facilities.
OCR managing director Billy Ong said the development is the group's maiden integrated e-commerce development, which is a significant milestone for OCR and positions it to benefit from the secular strong growth of the e-commerce industry and CRE segment.
"For OCR, this development is in line with our sector diversification strategy, which currently mainly features residential properties. With the target launch of our RM750 million affordable housing project in Shah Alam by the second half of 2022, the proposed integrated e-commerce spaces will further cement our foothold in the thriving city,” he added.
OCR shares closed 1 sen or 8.33% higher at 13 sen on Wednesday (April 20), giving it a market capitalisation of RM106.25 million. Magna Prima settled unchanged at 44 sen, for a market capitalisation of RM176.65 million.