KUALA LUMPUR (Sept 13): LBS Bina Group Bhd has teamed up with the Selangor state government to jointly undertake a mixed development township in Ijok, Selangor, with an estimated gross development value (GDV) of RM3.43 billion.

The property developer said its unit Kemudi Ehsan Sdn Bhd, together with Worldwide Property Management Sdn Bhd, had on Saturday (Sept 10) entered into a Development Rights Agreement with Menteri Besar Selangor Incorporation (MBI) to accept the development rights for the development on 10 parcels of leasehold lands in Ijok, collectively measuring 909.01 acres.

Worldwide Property Management is a wholly-owned subsidiary of Worldwide Holdings Bhd, which in turn is a wholly-owned subsidiary of Selangor State Development Corporation (PKNS), with its main business in property development.

According to its bourse filing dated Sept 10, the development lands with 99 years leasehold expiring on Feb 15, 2111, are located in the North West of Klang Valley.

The lands are well connected to established suburban centres such as Kota Damansara, Shah Alam and Sungai Buloh, via major roads — Jalan Batu Arang, Persiaran Mokhtar Dahari, Jalan Meru Tambahan and Jalan Kuala Selangor, as well as existing highways, including the LATAR Expressway, North-South Expressway and Guthrie Expressway.

"The accessibility to the lands is expected to be enhanced with new proposed expressways, including the DASH Highway (Damansara-Shah Alam Elevated Expressway) and West Coast Expressway," it added.

LBS Bina said the development land currently is a vacant land overgrown with shrubs and bushes and the category of land use condition is for building purposes.

"Part of the development land is charged to Malaysia Building Society Bhd (MBSB) as security for the loan granted by MBSB to PNSB Development Bhd," the filing read.

According to LBS Bina, the mixed development township will comprise majority landed residential units to be priced at affordable range; and Rumah SelangorKu would also be included in the development plan.

Based on the preliminary plan, the estimated GDV (excluding Rumah SelangorKu units) to be generated from the development land is approximately RM3.43 billion and to be developed over a period of 12 years.

The projected non-rumah SelangorKu GDV for Kemudi Ehsan's five parcels of land is RM1.83 billion and the projected non-rumah SelangorKu GDV for Worldwide Property Management's five parcels of land is RM1.6 billion only.

"KESB is currently in the initial stage of development planning and as such, is unable to ascertain the expected cost required for the development. Nevertheless, the management planned to finance the relevant development cost through the combination of internally-generated fund and/or bank borrowings," LBS Bina said.

It said Kemudi Ehsan had on Aug 4 signed a conditional consortium agreement with its Worldwide Holdings, with the purpose of setting out all obligation, cost and liabilities arising from or in connection with the development land.

Under the agreement, Kemudi Ehsan will bear 53.33% of the cost, while the remaining 46.67% will be borne by Worldwide Holdings.

On the rationale for the project, LBS Bina said the agreement fits into its property development strategy to enlarge its land bank, particularly in the Klang Valley for its future development project, and expected to generate future revenue stream and enhance profitability.

"The success of LBS Bina's township development in the Klang Valley with products priced at affordable range, was attested by the record sales achieved in the past two years. About 85% of the total sales of RM1.029 billion in 2015 was contributed from affordable products in Klang Valley, mainly from BSP 21 in Bandar Saujana Putra and SkyVilla in D' Island Residence," it added.

LBS Bina has been suspended from trading since last Friday (Sept 9), pending a material announcement. It last traded at RM1.72, for a market value of RM1.06 billion. — theedgemarkets.com

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