SHL partners Japan's Marubeni to develop RM327mil condo project

KUALA LUMPUR (May 3): SHL Consolidated Bhd is partnering Japanese general trading firm Marubeni Corp to develop a condominium project with an estimated gross development value of RM327 million in Bandar Sungai Long, Selangor.

Marubeni is one of Japan's largest general trading firms that is listed on the Tokyo Stock Exchange with a market capitalisation of around 1.204 trillion yen (about RM46 billion), as at market close today.

SHL said the partnership is being undertaken via its wholly-owned unit Sin Heap Lee Development Sdn Bhd (SHL Development), which had inked a joint venture (JV) agreement with Marubeni's own unit, MC Chance Malaysia Sdn Bhd (MCCM).

Under the deal, the two parties will incorporate a JV company (JVCo), in which SHL Development will take up a 67% stake while MCCM will hold 33%, to take on the project after acquiring the plot from a unit of SHL Development for RM50 million.

This will entail an initial subscription of 402,000 shares in the JVCo by SHL Development for RM402,000, with MCCM putting in RM198,000 for 198,000 shares within three days from the incorporation of the JVCo.

SHL Development and MCCM will then up their shares progressively in accordance to their stakes, which would result in the former owning 120.6 million shares for RM120.6 million in total by April 30, 2018, with the latter having 59.4 million shares for RM59.4 million.

The project will be funded by way of the share subscription from the two parties, with SHL Development financing its share of equity participation in the JVCo through internally-generated funds, said SHL.

The project, comprising 568 condominium units, will be located on a 9.56-acre plot in Seksyen 5, Bandar Cheras, Daerah Ulu Langat, which SHL said is close to the Sungai Long Golf & Country Club, University of Tunku Abdul Rahman and the Sungai Long Medical Centre.

The project is expected to take off some time this month, to be completed in March 2020. "In addition to the project, the JVCo will also undertake market research on housing demand in the Asean region, with the potential of engaging in property development projects in the region," added SHL.

SHL expects the new partnership to contribute positively to its future earnings, with sales secured via the JVCo.

Shares in SHL closed up one sen or 0.35% at RM2.83 today, for a market capitalisation of RM685.21 million. — theedgemarkets.com

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