S P Setia finalises terms of KL Eco City land privatisation

PETALING JAYA: Property developer S P Setia Bhd on Monday, Oct 24 announced that its subsidiary KL Eco City Sdn Bhd (KLEC) has entered into a privatisation agreement with KL Datuk Bandar over the development plan of 24.88 acres (9.95ha) in Kampung Haji Abdullah Hukum, Kuala Lumpur into the RM6 billion KL Eco City mixed project.

Considering that the Datuk Bandar allows KLEC to develop the land, the company has agreed to pay the former RM105.9 million, being the market value of Plots A, C, D, and E of the Dewan Bandaraya Kuala Lumpur (DBKL) land less the premium already paid by the developer for the alienation thereof to Datuk Bandar. The consideration shall be paid on a progressive and deferred basis over a maximum period of 36 months from the date of the agreement.

In addition, the developer agreed to pay Datuk Bandar RM191.9 million, being the minimum guaranteed profit of the proposed development, which shall be paid proportionately within one month from the date of issuance of the certificate of practical completion of each component of the proposed development.

The group stated that any additional profit representing the difference between 20% of the actual profit before tax and the minimum guaranteed profit shall be paid within one month from the date of the final audited account of each phase of the proposed development.

The 24.88-acre site is made up of about 4.38 acres belonging to S P Setia and 20.5 acres to Datuk Bandar. The land has been cleared and is currently vacant.

S P Setia has proposed to develop the land into an integrated commercial and residential development with a net saleable area of about 5.7 million sq ft. The proposed development has a gross development value of about RM6 billion and projected gross development cost of RM5 billion. The first phase was launched earlier this year.

"The privatisation agreement is the culmination of more than a decade's work by S P Setia to secure this prime redevelopment site for which it has unveiled plans to develop a fully integrated and sustainable green commercial city. With the formalisation of the privatisation process, the developer is now able to translate the strong registered interest in phase 1 of the KLEC project, comprising boutique and strata offices, into actual sales for FY11 and FY12," the group said.

"Phase 2 of the project comprising bite-sized residential units with unique lifestyle-driven propositions to appeal to young urbanites is targeted to be launched during the first half of 2012. Given the highly positive reception from this savvy target market group thus far, management is optimistic that the eventual launch will be a success," it added.

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