MK Land clinches RM4b project in Bangalore

KUALA LUMPUR: MK Land Holdings Bhd yesterday sealed an agreement with Embassy Group of India to develop a RM4 billion “affordable homes” project in North Bangalore, India.

The development will be carried out by MK Embassy Land Sdn Bhd, which is a joint venture between MK Land (47.5%), Star Dreams Pte Ltd (47.5%) — a subsidiary of Embassy Group, and MKN Embassy Development Sdn Bhd (5%) — a subsidiary of the Emkay Group.
Emkay Group is the private vehicle of Tan Sri Mustapha Kamal Abu Bakar who is major shareholder of MK Land with a 47.37% stake via direct and indirect interests.

According to a statement issued by the joint-venture parties yesterday, the development will be carried out on a piece of land measuring approximately 185 acres in North Bangalore and will comprise 14,400 residential units with some two million square feet of commercial space.

“Three types of affordable residential units will be offered with selling prices ranging from approximately RM115,000 to RM175,000 per unit,” said the joint-venture parties.

The statement added that MK Embassy was in discussion with local banks especially EXIM Bank to finance the development of the Bangalore project.

The signing of the joint venture was between Mustapha, as executive chairman of MK Embassy; and Rajesh Bajaj, vice-president, corporate affairs of Embassy Group; and was witnessed by Prime Minister Datuk Seri Najib Razak.

Mustapha said he is optimistic of the RM4 billion development projects and believes that MK Land will be able to export its expertise in developing affordable homes “to help address the acute shortage of housing for the masses in India, especially in Bangalore”.

“We believe that the take-up rate for these affordable units is going to be brisk, since the demand for affordable houses in Bangalore has increased significantly. The property boom in Bangalore in past years had created a huge demand for affordable homes as property prices recorded double-digit appreciations” he added.

The statement quoted a survey by Knight Frank that in the next two years, the housing requirement for Bangalore in the affordable homes category is approximately 643,000 units.

According to Mustapha, there will be approximately RM1.2 billion worth of construction contracts to be awarded from this project, which will preferably be given to competent contractors, especially Malaysian companies with the necessary expertise and experience. Emphasis will also be given to contractors who are using Industrialised Building Systems (IBS) in their construction, he said.

Embassy Group was established in Bangalore in 1985, and is one of the leading property developers in India. The group has developed a portfolio exceeding 24.5 million sq ft of commercial and residential spaces across India over the last 25 years. Its properties’ tenants include multinational corporations such as IBM, Microsoft, Fidelity and Yahoo.

This article appeared in The Edge Financial Daily, October 28, 2010.

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