SP Setia, Tradewinds to develop housing project for KL City Hall in return for land

PETALING JAYA: Retro Highland Sdn Bhd, in which SP Setia Bhd and Tradewinds Corp Bhd own a 50% stake each, has entered into a privatisation agreement with Kuala Lumpur City Hall (DBKL) for the construction of the Quality Sustainable People Housing (QSPH) project in Cheras.

In return, Retro Highland will be awarded 52.25 acres of leasehold land in Cheras valued at RM1.19 billion, to be used for a mixed project with an estimated gross development value (GDV) of RM11.03 billion and a development period of 11 years.

The agreed value of the exchange land of RM1.19 billion comprises the construction cost for Phase 1 and Phase 2 of up to RM344.79 million and RM835.12 million, respectively and cash consideration of RM14.99 million. If the construction cost of the QSPH development is lower than the estimated cost, a cash consideration for the difference will be paid to DBKL accordingly.

Retro Highland is a special purpose vehicle of SP Setia and Tradewinds Corp Bhd to undertake the privatisation project.

SP Setia said the QSPH project is a public- private strategic partnership undertaking, which is in line with the government’s intention to encourage the private sector to form partnerships with DBKL to undertake urban renewal initiatives under the KL Structure Plan 2020.

The QSPH project consists of 3,971 residential units, 112 shop/stall units, a market and other public facilities. It is expected to be completed by 2028.

Despite having recently acquired large tracts of landbank via the acquisition of I&P Group Sdn Bhd, SP Setia said it is an opportunity for it to increase and replenish its current landbank in key areas of Kuala Lumpur via the privatisation agreement.

SP Setia said the proposed development is expected to contribute positively to the group’s future earnings in the medium to longer term. It will, it added, benefit from the developments surrounding the exchange land with amenities, facilities and infrastructure that are already in the vicinity.

On Bursa Malaysia yesterday, SP Setia closed down 1 sen or 0.33% at RM3.01 on volume of 523,400 shares.