UEM Sunrise secures RM415 mil entitlement in KLCC land pact with Exsim KLCC

PETALING JAYA (July 3): UEM Sunrise Bhd’s indirect wholly owned subsidiary, Aurora Tower At KLCC Sdn Bhd, has entered into a Development Rights Agreement (DRA) with Exsim KLCC Sdn Bhd for the proposed development of a 1.59-acre commercial site in Kuala Lumpur into a mixed-use project comprising a hotel, hotel residences and a retail mall, subject to the necessary approvals.

In a Bursa filing today, the property developer said the proposed development is targeted for completion by Dec 31, 2036, barring any unforeseen circumstances.

Under the DRA, UEM Sunrise will grant Exsim KLCC the right to undertake and deliver the development of Lot 149, bringing together the group’s strategic landholding with a partner that has an established track record in delivering premium developments within the KLCC precinct.

The agreement provides UEM Sunrise with a guaranteed entitlement of RM415 million. In addition, it incorporates a profit‑sharing mechanism that enables UEM Sunrise to participate in the future success of the development while aligning the longer‑term interests of both parties.

UEM Sunrise said the deal forms part of its portfolio management and asset optimisation strategy. The structure allows the group to realise upfront value from the land while assigning development, funding, planning, construction, sales and completion responsibilities to a third‑party developer.

The proceeds are intended to be utilised for partial repayment of borrowings and working capital, supporting the group’s capital allocation priorities and higher‑priority projects within its development pipeline, particularly in the Central and Southern regions.

As at Dec 31, 2025, the site carried a net book value of RM320.7 million, while a valuation conducted on Feb 22, 2026 placed its market value at RM327 million.

UEM Sunrise estimates the transaction will result in an approximate gain of RM66 million from the recognition of the guaranteed entitlement, contributing positively to its earnings for the financial year ending Dec 31, 2026.

The group also expects the transaction to enhance net assets and reduce gearing following the intended utilisation of part of the proceeds for debt repayment and working capital.

Beyond the guaranteed entitlement, the profit‑sharing arrangement entitles UEM Sunrise to 10% of any project profit before tax exceeding RM610 million. The mode of settlement, whether in cash or in kind, will be determined following discussions between both parties upon satisfaction of the conditions outlined in the agreement.

In a separate media statement, UEM Sunrise managing director and CEO Shaharul Farez Hassan said the strategic partnership reflects the group’s disciplined approach to portfolio optimisation and capital allocation.

“This strategic partnership reflects our disciplined approach to portfolio optimisation and capital allocation. It enables us to realise the full potential of a strategic asset while participating in the success of the development,” he said.

“More importantly, the DRA allows us to leverage Exsim KLCC’s proven development capabilities and deep understanding of the KLCC market to accelerate development of the site, while enabling UEM Sunrise to focus on our own development pipeline across our priority growth corridors. Together, this strengthens our position as a focused property developer committed to delivering sustainable long‑term value for our shareholders,” he added.

Farez said Kuala Lumpur and the Klang Valley remain important markets for the group, with ongoing and upcoming projects in Mont'Kiara, Kiara Bay, Cheras and Petaling Jaya, including on the former Dutch Lady site and in Kelana Jaya.

The group is also advancing its next phase of growth in Iskandar Puteri, where it is the largest landowner and master developer of the Gerbang Nusajaya and Puteri Harbour integrated townships, including the Gerbang Nusajaya Industrial Park to capture opportunities arising from the Johor‑Singapore Special Economic Zone (JS‑SEZ).

..........

Read about emerging trends, data-backed insights, growing subsectors, and expert commentaries in EdgeProp print. Subscribe now for your free copy!