KUALA LUMPUR (Oct 1): Suria Capital Holdings Bhd and Gabungan AQRS Bhd have scrapped plans to jointly develop a mixed development known as One Jesselton Waterfront on 6.28 acres of land in Kota Kinabalu, Sabah — six years after the agreement was inked.

In a bourse filing on Thursday, Suria Capital said as there continues to be uncertainty in the current market condition due to the Covid-19 pandemic, which had impacted the construction and the tourism sectors in the State, both parties have come to a conclusion that it is no longer viable for the project to be pursued within the stipulated time and is no longer achievable due to the prevailing unfavourable economic and market conditions.

In a separate filing, Gabungan AQRS said the two parties have mutually agreed to terminate a joint venture (JV) agreement entered into in March 2015 to develop the 6.28-acre land that was owned by Suria Capital. Related advances totalling RM7.94 million paid by Gabungan AQRS to Suria Capital will be fully refunded.

Still, Gabungan AQRS noted that both parties may reconsider to jointly-work towards realising the potential commercial value of One Jesselton Waterfront in the future or once the global tourism sector normalises.

As a result, Gabungan AQRS has also terminated the further extension of a Memorandum of Understanding (MoU) with Singapore-based investment firm Tera Capital Pte Ltd as there was no further material development since it was signed in July 2017. Under the terms of the MoU with Tera Capital, Gabungan AQRS was supposed to develop the hotel and serviced suites portion of the development according to the design concept provided by Tera Capital. The latter would bring in a partner-contractor to form a JV with Gabungan AQRS for the project.

Gabungan AQRS said both terminations will not have any material effect on the group's issued and paid-up share capital, substantial shareholders’ shareholdings, earnings, net assets and gearing for the financial year ending Dec 31, 2021.

Gabungan AQRS had said then that the proposed JV was in line with its long-term strategic plan to retain the One Jesselton Waterfront development as recurring income assets.

Apart from the hotel and serviced suites, the 6.28-acre development includes residential apartments, a retail shopping mall, office tower and ancillary services and facilities.

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