Sunway to develop condo project with Mitsui Fudosan

KUALA LUMPUR: Sunway Bhd is joining forces with Japanese property developer Mitsui Fudosan (Asia) Pte Ltd to build two blocks of condominium units at Sunway Geo Residences Development, located within the Sunway South Quay development.

Sunway said in an announcement yesterday that the proposed 472 condominium units form part of its integrated development at Sunway South Quay, which is expected to generate an estimated gross development value of RM319 million.

The project will be carried out via Prosper Revenue Sdn Bhd (PRSB), which is 67% owned by Sunway South Quay Sdn Bhd (SSQ) and 33% by Mitsui Fudosan.

SSQ is the joint venture vehicle of Sunway Lagoon Sdn Bhd (a wholly owned subsidiary of Sunway), the Employees’ Provident Fund Board and Kuwait Finance House (M) Bhd.

The subscription and shareholder agreement, which outlines the details of the joint venture, provides for SSQ to appoint four directors to the board of PRSB while Mitsui Fudosan’s subsidiary SEA Investment Four Pte Ltd will have two directors on the board.

SSQ will also have the power to appoint the CEO and financial controller to manage the operations of PRSB.

SSQ has also entered into a sale and purchase agreement with PRSB to sell the 27,520 sq m land, on which the condominium blocks will be built, for RM59.24 million. This translates into a rate of RM200 per sq ft, said Sunway.

“The total purchase consideration shall be satisfied by PRSB in the form of cash or a combination of cash and new shares or preference shares in the share capital of PRSB to be issued by PRSB to SSQ on the completion of the sale and purchase agreement,” it said.

PRSB will fund the proposed acquisition by way of an issuance of new shares to SSQ and a capital injection from its shareholders.

Sunway’s share price closed at RM2.96 yesterday, down 0.34% from the previous trading day.

This article first appeared in The Edge Financial Daily, on October 25, 2013.