KUALA LUMPUR: MB World Group Bhd plans to develop 406 apartment units worth RM176 million in gross development value, on a 6.26-acre (2.53ha) land in Johor, after securing the developmental rights to the land from its owner.

According to MB World’s stock exchange filing, its unit MB Max Sdn Bhd has inked a development rights agreement (DRA) with Shiya Sdn Bhd, which owns the freehold land that is made up of 76 plots in Sierra Perdana, Johor Baru.

MB World said it opted for the DRA as opposed to an outright land bank purchase, as the latter would “require significant cash outlays”. In granting MB World the developmental rights and all claims to the land, Shiya will get a RM24 million entitlement from the deal. Shiya is a private civil contractor and building developer owned by Aminah Mohamed (70%) and Mohd Isnin Md Latib (30%).

“This is consistent and in line with the group’s strategic direction to focus on property development activities to sustain its growth through acquisitions, joint ventures or other arrangements with landowners,” MB World said.

On the entitlement to Shiya, MB World said it is on a “willing buyer-willing seller” basis, after taking into account the development potential and prospects for the land.

MB World said its plan to develop the land should contribute positively to its future earnings. “Any profit attributable to MB World Group would be realised in stages over the tenure of the project based on the progress of the project,” it added.

This article first appeared in The Edge Financial Daily, on June 26, 2018.

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