IOI Prop scraps JV, but S’pore project still on

PETALING JAYA: IOI Properties Group Bhd has scrapped its joint venture (JV) with Hongkong Land International Holdings Ltd (HKLI) for a project at Central Boulevard in Singapore, despite the commencement of construction work.

IOI Properties said the memorandum of agreement (MoA) with HKLI was terminated yesterday due to nonfulfilment of certain conditions in the JV.

However, it is not known which conditions were not met.

The MoA was conditional on the fulfilment of conditions by March 12 including obtaining additional conveyance duties remission approval; Urban Redevelopment Authority (URA) approval; lenders’ approval; additional buyer stamp duty remission approval; and Bank Negara Malaysia’s approval.

Recall that the JV company Wealthy Link Pte Ltd, in November 2016 successfully tendered for the 1.1 haCentral Boulevard site for a record price of S$2.57 billion (RM7.63 billion).

Last month, Wealthy Link obtained the provisional permission from the URA to begin development works on the land. The tender for the piling works has been awarded and construction has already started.

The project comprises two office towers of about 1.26 million sq ft of leasable space with a small retail podium of about 30,000 sq ft.

IOI Properties’ original cost of investment in Wealthy Link as at March 31, 2017 was about S$2.84 billion (RM8.44 billion). It was to hold a 67% stake in the joint venture.

Nonetheless, IOI Properties said, the JV termination will not have an impact the development of the project given that it has sufficient indepth expertise, financial capability, and a track record of completed projects in Singapore.

It added that it has the confidence to proceed with and complete the proposed development. The termination is not expected to have any material impact on its earnings and net asset per share.

On Bursa Malaysia yesterday, IOI Properties closed down 0.55% at RM1.81 with 1.8 million shares done.