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THE prime tract that Titijaya Land Bhd and its joint-venture partner Amona Development Sdn Bhd are eyeing is located near Berjaya Times Square in Imbi — within a 2km radius of the upcoming Tun Razak Exchange (TRX) — sources say.
The joint-venture parties are looking to secure the land located on the corner of Jalan 1/77B and Jalan Changkat Thambi Dollah, registered in the name of the Federal Land Commissioner, to undertake property development projects. This parcel, measuring 2.7 acres or 117,612 sq ft, is currently in use as a parking lot. (See map)
It is a land-for-school swap deal, meaning that the JV will build a school elsewhere in return for the ownership of the tract.
On Oct 30, Titijaya announced to Bursa Malaysia that its wholly-owned unit Titijaya Resources Sdn Bhd had entered into a shareholders’ agreement with Amona to form a strategic collaboration and to set up a 40:60 joint venture called Amona Titijaya Sdn Bhd. Amona holds the majority in the tie-up.
Titijaya says that in line with its plans to expand its property development business, it wants to leverage Amona Titijaya to participate in future property development opportunities in Kuala Lumpur.
In the announcement, Titijaya adds that Amona has already identified a piece of land in the capital city and has proposed to the government to build a school “in exchange for a [piece of] government land situated at Bukit Bintang, Kuala Lumpur”. It did not reveal the location of the tract it is eyeing.
“The proposal is in an advanced stage and the company will make further announcements after definitive and conclusive terms have been agreed upon, and the proposed privatisation agreement has been agreed and signed,” the announcement reads.
When contacted, Titijaya declined to comment on the location of parcel.
The Edge understands that over the years, many parties have been eyeing this empty parcel owned by the government.
It is interesting to note that the tract that Titijaya is keen on is located just a few meters from a recent prominent land deal.
Last month, The Edge revealed that a local company, which was recently acquired by Singapore-listed Debao Property Development Ltd, was in the process of concluding a land purchase in Imbi, Kuala Lumpur. This 90,008 sq ft site is also located in Jalan 1/77B, where SRJK (C) Jalan Imbi is located. This Chinese primary school will be relocated to Taman Taynton in Cheras.
Based on the agreed price of RM388 million, Debao’s purchase works out to RM4,310 psf. Will the government land that Titijaya wants fetch as much?
At RM4,310 psf, the 2.7 acres could be worth as much as RM506.91 million. However, a real estate valuer contacted by The Edge points out that the valuation of the Amona Titijaya parcel may be closer to RM2,800 psf.
He says factors that have to be considered, apart from the proximity to TRX and the recent land transaction next door, would include an access road and the fact that the Chinese school parcel has already been granted a development order. At RM2,800 psf, the land could be worth RM329.31 million.
Looking at Titijaya’s balance sheet as at June 30, the company was in a net cash position of about RM31.27 million. Its cash pile was at RM189.26 million compared with borrowings of RM157.89 million, of which RM103.35 million was long-term debt.
While it is not known what Amona Titijaya proposes to build on the parcel, it would not be surprising if it chose to build a mixed use development project, similar to many others in the vicinity. Based on the size of the land, a back-of-the-envelope gross development value of the project is likely to be in excess of RM1 billion.
Like its property peers, Titijaya’s share price has been on a downward slope due to concerns over the softening property market. The property stock has slipped from its peak of RM2.80 in July last year to a low of RM1.50 in September. It rebounded to RM1.78 last Thursday.
Titijaya’s partner, the Amona Group of Companies, is involved in property and construction, energy, telecommunications and technology, infrastructure, green technology and maritime business.
On its website, Amona says it has completed a number of commercial and residential developments in various parts of the country, through strategic partnerships with state government agencies in the form of joint ventures or by way of privatisation.
Amona has also teamed up with IJM Land Bhd, the property arm of IJM Corp Bhd, to develop the 58-acre Pantai Sentral Park in Bukit Kerinchi. To be developed over 13 phases, this project has a GDV of RM2.5 billion.
The shareholders of Amona are Amona Permodalan Holdings Sdn Bhd (60%), Datuk Seri Syed Amir Abidin Tuanku Syed Putra Jamalullail (20%) and Datuk Zaharudin Zainol Rashid (20%). Apart from Syed Amir, other board members include Datuk Othman Ahmad, Abd Manaf Ahmad, Saudah Ahmad and Hafiz Othman.
The shareholders of Amona Permodalan Holdings Sdn Bhd are Datuk Othman Ahmad (60%), Datin Noriah Mohd Yusof (10%) and Abd Manaf Ahmad (30%). All three shareholders sit on the board of directors. A fourth director is Datuk Mohd Noor Yusof. The company, incorporated in 1993, has been an exempt private company since 2012.
This article first appeared in The Edge Malaysia on Nov 9, 2015. Subscribe here for your personal copy.
