TA Global in RM1.5 billion joint-development project in Canada

KUALA LUMPUR/VANCOUVER (Mar 15): TA Global Bhd has entered into an "umbrella deed" with Birkbeck Trust to jointly build a hotel and residences in Vancouver, Canada. The estimated gross development value (GDV) of the a project is C$496.4 million (RM1.5 billion).

The project, which includes a 64-storey mixed-use commercial and residential building containing a 161-room hotel, will require an initial contribution of C$110 million from each company, TA Global said in a statement on Wednesday.

The estimated profit from the development is C$136.6 million, based on an expected total development cost of C$359.8 million, which includes C$110 million land cost, it said. The expected profit has not taken into account interest cost on the C$85 million contribution to the joint venture by the parties.

TA Global will assume C$85 million of Birkbeck's existing debt liabilities through investing in the partnership. The loan contribution, said the company, will be made in accordance with the construction schedule and on a staggered basis. It will be repaid to TA Global upon completion of the project.

Aside from the C$110 million initial contribution, TA Global expects to incur an additional financial commitment of C$75 million in external borrowings to put the joint development onstream and hotel into operation within the next five years.

The company expects construction to begin in 3Q12 with completion expected by mid-2016. Approvals required for the proposed joint development include those from the company's shareholders and Bank Negara Malaysia.

The proposed joint development is expected to bring synergistic benefits to the group as it is in line with its core business in property development and investment, TA Global said, adding that the land "is strategically located in the central business district of Vancouver... and is adjacent to FortisBC, the existing award-winning 24-storey AAA-rated corporate office building TA Global owns".