Tropicana to launch Phase 1 of Tropicana Aman this month

KUALA LUMPUR (April 24): Property developer Tropicana Corp Bhd will launch the first phase of its Tropicana Aman (formerly Canal City) mixed township in the vicinity of Kota Kemuning in Shah Alam, Selangor this month.

The first phase of the development with a gross development value (GDV) of RM13 billion features 432 units of 2- and 3-storey terraced houses.

Besides Tropicana Aman, the property developer is expected to launch two or three new projects in 2015.

Yesterday, Tropicana signed a partnership agreement with Tenby Schools to build an international school campus at Tropicana Aman. The construction cost is estimated at RM45 million. It is due to be completed by 2018.

“The international school will be a catalyst for our buyers to buy [properties] at the [Tropicana Aman] development,” Tropicana group chief executive officer Datuk Yau Kok Seng told a press conference after the signing ceremony.

On the dispute over the group’s purchase of the land with the Selangor government and the terms of its settlement, Yau said, “All issues have been resolved”.

To recap, the Tropicana Aman land was initially sold by the Selangor government for RM587 million at a value of RM18.50 per sq ft payable in 12-year instalments to Tropicana’s wholly-owned subsidiary, Sapphire Index Sdn Bhd (SISB) in 2013.

Under that agreement, the state government was entitled to a 5% GDV share and 3% profit share, amounting to a total of RM1.3 billion payable over 20 years. However, 11 months after the sale and purchase agreement was signed, SISB sold 308.72 acres(124.9ha) of land to Prominent Stream Sdn Bhd, a wholly-owned subsidiary of Eco World Development Sdn Bhd, at a value of RM35 per sq ft or RM470 million, with a net profit of RM170 million.

After public uproar over the deal, the Selangor government renegotiated new terms of the land sale.

Recently, Selangor Menteri Besar Datuk Mohamed Azmin Ali was reported as saying that a new agreement had been signed.

It was reported that the new terms of agreement are that the state government is now entitled to a 9% share of the land GDV, with the payment period shortened from 20 years to 12 years, and that SISB is barred from selling the land to third parties.

This article first appeared in The Edge Financial Daily, on April 24, 2015.

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