KUALA LUMPUR: Construction firm JAKS Resources Bhd and Star Publications (Malaysia) Bhd will jointly develop the former Star headquarters in Section 13, Petaling Jaya, into a RM370-million mixed residential and commercial development.
JAKS Resources said in a filing to Bursa Malaysia on March 3 that its indirect subsidiary JAKS Island Circle Sdn Bhd had on the same day entered into a joint development agreement with Star Publications for the development of the six-acre leasehold land.
“The proposed development will entail a mixed residential and commercial development comprising two office blocks, a commercial-cum-educational block and a residential block. The land currently has several blocks of warehouses that are occupied but will be vacated by the year end,” it added.
To partly finance the development, Star Publications and JAKS Island Circle will jointly apply for banking facilities of not more than RM50 million. The latter will also use its internal funds or source external borrowings to finance the development.
JAKS Island Circle is required to submit the application for the conversion of land use and the extension of the lease on the Land to a 99-year lease upon the conversion of the land use from “Industry” to “Building”.
Upon completion of the project, JAKS Island Circle will be entitled to 70% of the gross development value (GDV) or RM259 million of the saleable office units, based on the plot ratio of not less than 1:3.5. Star Publications will be entitled to the remaining saleable office units.
“In the event that JAKS Island Circle is successful in increasing the plot ratio, then Star Publications shall be entitled to a further 5% of the increase in the GDV,” it said.
The parent company added that JAKS Island Circle shall be solely responsible to Universiti Tunku Abdul Rahman (UTAR) in fulfilling the terms of the build and let agreement and the lease agreement, and that JAKS Island Circle shall grant a right of first refusal to UTAR to enter into a lease of up to 25 years in respect of the commercial-cum-educational block at the monthly rental of RM2 psf and monthly service charges of 20 sen psf for the initial lease period of the first three years.“JAKS Island Circle and UTAR shall agree on and execute the build and let agreement and the lease agreement and further agree on the proposed building plan and specifications for the block, failing which, JAKS Island Circle shall be at liberty to deal with such other party in respect of the block and convert the design, usage and building plan in such manner as JAKS Island Circle shall deem fit,” it said.
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