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Fiamma forms JV to develop semi-detached houses in Batu Pahat

KUALA LUMPUR (Dec 8): Fiamma Holdings Bhd has teamed up with four landowners to develop residential properties in Batu Pahat, Johor that have a potential gross development value (GDV) of RM26 million.

Its 60%-owned unit Pinang Sutera Sdn Bhd (PSSB), which is held under Fiamma Development Sdn Bhd, has entered into a joint venture agreement with Goh Ah Tee, Goh See Lun, Tee Leok Twan, and Lee Cheng Chua, who own a quarter each of the 1.67-hectare plot of land.

Thirty units of double-storey semi-detached houses with an estimated build-up area of 2,800 square feet each are planned to be built, subject to approval, Fiamma said in a filing with Bursa Malaysia today.

“(The project) has an estimated development cost of RM18 million and estimated gross margin of approximately 30%,” Fiamma said.

Under the agreement, PSSB will pay RM5.4 million to the landowners for the right to develop the land, as well as for the development order and building plan approval that the landowners are to secure. As the developer, the company will bear all costs and expenses, as well as retain absolute control and management of the project.

Meanwhile, the landowners will seek approval to change the land use category from its current agricultural purpose.

No valuation has been carried out on the land and Fiamma is not privy to information regarding the initial investments for the land, Fiamma said.

Barring any unforeseen circumstances, the proposed joint development is expected to be completed within the next five years, Fiamma said.

“The proposed joint development is in line with Fiamma’s long-term strategy to expand its landbank and scale up business operations in the southern region of Malaysia,” it said.

The development will be funded via internally generated funds and/or bank borrowings, Fiamma added.

Shares in Fiamma were untraded today, leaving the price unchanged at 50 sen for a market capitalisation of RM262.36 million. — theedgemarkets.com

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