KUALA LUMPUR (Aug 21): Oriental Interest Bhd has tied up with Dijaya Gemilang Sdn Bhd (DGSB) to jointly undertake a mixed development on a piece of freehold land in Kedah, with a gross development value (GDV) of RM671 million.
In a filing with Bursa Malaysia today, the property developer said its unit, OIB Properties (KV) Sdn Bhd (OIBKV), entered into an agreement today with DGSB — the landowner of the said tract — for the proposed development.
According to Oriental Interest, OIBKV and DGSB have agreed to jointly undertake the development of the land, comprising residential or commercial scheme known as Permaiputra — or any other scheme deemed fit and mutually agreed upon — in Sg Petani, Kedah.
The freehold land measures 437,140 sq meter (0.0437 ha) and its land use is categorised for ‘building’. The land is currently charged to United Overseas Bank (Malaysia) Bhd.
OIBKV will be the developer of the project and shall be responsible for the development costs, which Oriental Interest said would be funded via internally-generated funds or bank borrowings, though the ratio is not fixed as yet.
Under the agreement, DGSB will be entitled to 20% of the total sale proceeds of the residential buildings and 28% of the sale proceeds of the commercial ones.
It also said that the proposed development is in line with its strategic planning to leverage on its strengths in property development and construction, to team up with landowners for successful execution of projects contemplated.
Oriental Interest said the proposed development is expected to enhance the net assets of the group, through contribution in earnings in the future financial years, when it is developed and sold progressively.
Barring any unforeseen circumstances, and subject to the fulfilment of all conditions precedent as set out in agreement, Oriental Interest expects the proposed development to be completed by the year 2030.
Shares in Oriental Interest (fundamental: 2.1; valuation: 2.6) closed three sen or 1.11% higher today at RM2.73, for a market capitalisation of RM90.54 million.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)