Share
KUALA LUMPUR: LBS Bina Group Bhd has inked a deal with a Johor state government unit to jointly develop four plots of leasehold land measuring 14.16 acres (5.73ha) in Tampoi with a gross development value (GDV) of RM815 million.
LBS Bina’s participation in the joint land development is through its 60%-owned subsidiary, Koleksi Sigma Sdn Bhd (KSSB), while the state government is represented by YPJ Multi Ventures Sdn Bhd (YPJMV), unit of Yayasan Pelajaran Johor (YPJ).
YPJMV is the beneficial owner of the leasehold land, with the lease expiring in April 2094. The land is located near the Pasir Gudang Highway, the backbone of the road system linking Johor Baru to Pasir Gudang.
In a filing with Bursa Malaysia yesterday, LBS Bina said the development will consist of 2,311 units of serviced apartments, a sewerage treatment plant and 240 residential units under the affordable housing programme.
The company said the project cost is estimated at RM587.6 million, which it plans to finance via a combination of internal funds and/or bank borrowings.
“This joint venture fits into the group’s property development strategy in enhancing its landbank and it is a good move to tap the red-hot demand for properties in the booming economic zone in the state of Johor.
“The management is confident that the development will be well received in view of its strategic location and property prices that fall in the mid-range segment, with prices ranging between RM150,000 and RM600,000 per unit,” the property developer said.
The company said construction of the project will commence within 12 months after the signing of the joint development agreement (JDA). It will take three years to complete the construction of the affordable housing units and seven years for the serviced apartments.
Under the deal, YPJMV is entitled to 10% of the GDV of the serviced apartment units, which will not be less than RM81.54 million. The state government unit will also be entitled to all proceeds from sale of the affordable home units, after deducting 3% for KSSB’s administration fee.
In addition to the 3% administration fee for the affordable housing units, KSSB will be entitled to 90% of the serviced apartment units after deducting YPJMV’s 10% entitlement.
LBS Bina said work on the development is expected to commence in early 2015 to enable the group to make a fast turnaround on the development land, which will benefit both the purchasers as well as the company.
As it is expected to commence in 2015, the company does not expect the JDA to contribute to its earnings for the financial year ending Dec 31, 2014.
This article first appeared in The Edge Financial Daily, on April 22, 2014.
