Ti­ti­jaya part­ners China firm for RM2.1b project

> Signs deal with CREC De­vel­op­ment for site at Em­bassy Row in Kuala Lumpur

The Sun (Malaysia) - - SUNBIZ - BY LEE WENG KHUEN

KUALA LUMPUR: Ti­ti­jaya Land Bhd will part­ner China’s CREC De­vel­op­ment (M) Sdn Bhd (CRECD) for a mixed de­vel­op­ment project at Em­bassy Row, Jalan Am­pang, Kuala Lumpur, with a gross de­vel­op­ment value (GDV) of RM2.1 bil­lion.

To fa­cil­i­tate the col­lab­o­ra­tion, Ti­ti­jaya’s wholly-owned sub­sidiary Ti­ti­jaya Re­sources Sdn Bhd and CRECD en­tered into a share sale agree­ment yes­ter­day to ac­quire the en­tire stake in Am­pang Av­enue De­vel­op­ment Sdn Bhd from Chan Peng Kooh and Rafi­dah Me­nan for RM80 mil­lion.

Am­pang Av­enue’s sub­sidiary Ni­pah Val­ley Sdn Bhd is the reg­is­tered pro­pri­etor of the 6.06ha Jalan Am­pang lease­hold land, which is val­ued at RM403 mil­lion cur­rently.

CRECD will be ap­pointed the main con­trac­tor of the de­vel­op­ment project, known as 3rdNv­enue. It will also mon­i­tor, man­age and su­per­vise the day-to-day con­struc­tion op­er­a­tional re­lated mat­ters.

China Rail­way Group is no stranger to Malaysia and is cur­rently team­ing up with Iskan­dar Wa­ter­front Hold­ings for the RM200 bil­lion Ban­dar Malaysia project. It has also com­mit­ted to in­vest­ing US$2 bil­lion (RM8.1 bil­lion) to set up its re­gional cen­tre there.

Ti­ti­jaya and CRECD will own a 70% and 30% stake re­spec­tively in the 3rdNv­enue project. Ti­ti­jaya’s por­tion of the to­tal pur­chase con­sid­er­a­tion, amount­ing to RM56 mil­lion, will be sat­is­fied via in­ter­nally gen­er­ated funds and/or bank bor­row­ings.

The project, which con­sists of small of­fice home of­fice, ser­viced apart­ments and re­tail units, is ex­pected to con­trib­ute 20-30% to the group’s earn­ings from FY18, ac­cord­ing to Ti­ti­jaya man­ag­ing di­rec­tor Tan Sri Lim Soon Peng.

It will be de­vel­oped over the next seven years in four phases. The first block of ser­vice suites will be launched in the first half of next year.

The in­dica­tive sell­ing price for the first phase is about RM900 per sq ft with buil­tups from 450 to 650 sq ft. The gross de­vel­op­ment cost for the en­tire project is RM1.2 bil­lion.

When asked of the low ac­qui­si­tion price of RM80 mil­lion against the land value of RM403 mil­lion, Lim ex­plained that it is only for the de­vel­op­ment rights.

“We only buy over the de­vel­op­ment rights at RM80 mil­lion. Of course, there are other pay­ments, which will be paid through the project pe­riod,” he added.

Lim said the joint ven­ture with CRECD will al­low both par­ties to lever­age on the syn­er­gis­tic out­comes for mu­tual ben­e­fit.

“Given the strate­gic lo­ca­tion of the land, cou­pled with con­nec­tiv­ity to key roads and high­ways, the pro­posed de­vel­op­ment will cater to the an­tic­i­pated de­mand for com­mer­cial and res­i­den­tial prop­er­ties within the prime area,” he said.

He also be­lieves the pro­posed ac­qui­si­tion will com­ple­ment the group’s ex­ist­ing busi­ness in prop­erty de­vel­op­ment in seek­ing new strate­gic growth and fu­ture ex­pan­sion plans within the prop­erty de­vel­op­ment in Greater Kuala Lumpur as well as to en­sure earn­ings sus­tain­abil­ity mov­ing for­ward. The ac­qui­si­tion is ex­pected to be com­pleted by the first quar­ter of 2017.

Ti­ti­jaya shares rose 4 sen or 2.22% to close at RM1.84 yes­ter­day, with some 2.6 mil­lion shares chang­ing hands.

On a sep­a­rate note, China Rail­way Dong­fang Group man­ag­ing di­rec­tor Cai Zemin said the group is look­ing for more in­vest­ments abroad, in­clud­ing Malaysia.

“The pres­ence of Chi­nese firms in Malaysia is still small, we want to in­crease our in­vest­ments in Malaysia,” he said.


From left: Cai, Ur­ban Well­be­ing, Hous­ing and Lo­cal Gov­ern­ment Min­is­ter Tan Sri Noh Omar and Lim af­ter the sign­ing cer­e­mony and press con­fer­ence in Kuala Lumpur yes­ter­day.

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