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Wednesday, 1 March 2017

(The Star) Titijaya and China Railway sign deal for The Shore

PETALING JAYA: Titijaya Land Bhd and CREC Development (M) Sdn Bhd (CRECD) have entered into a framework agreement for a RM575mil gross development value (GDV) property development in Kota Kinabalu, Sabah, known as The Shore.

In addition, Titijaya also inked a serviced residence management agreement with The Ascott Ltd.

Under the agreement, Ascott will manage the serviced residence components of The Shore for 15 years.

Titijaya group managing director Tan Sri Lim Soon Peng said that the framework agreement with CRECD will enable The Shore to leverage on China Railway Engineering Corp (CREC)’s strength in the construction sector to further enhance the built quality and project implementation.

“In turn, CREC stands to tap into the growing property market in Sabah through collaborations with Titijaya.

“With the strong CREC presence in China, The Shore will attract more investors from China, particularly those who favour the commercial and residential property industry, as well as hospitality property investment.

“Besides that, having The Ascott group on board, whom has deep presence in Greater China, will surely help elevate branding and augment the future development value of The Shore, and attracting tourists from Greater China, such as mainland China, Hong Kong and Taiwan,” he said.

According to a filing on Bursa Malaysia, the framework agreement denotes the provisional intention of both parties, in terms of the engineering, procurement, construction and commission agreement, joint marketing collaboration for The Shore, as well as participation in business opportunity offered by Laksana Wawasan Sdn Bhd.

Laksana Wawasan is the beneficial owner of the proposed Ascott Hotel.

CRECD is a subsidiary of CREC, which is one of the world’s largest construction companies, developer of Bandar Malaysia, as well as Titijaya’s joint venture partner in the Embassy Row development.

The framework agreement between Titijaya and CREC was signed after a share sale agreement for the proposed acquisition of entire issued share capital of Sri Komakmur Development Sdn Bhd (SKDSB) for a purchase consideration of RM70.9mil.

SKDSB is the registered owner of 3 parcels of land in Sabah, measuring a total of 75.44 acres, which has a cumulative market value of RM172.64mil.

The Shore is located in Kota Kinabalu and has a total land area of 1.82 acres.

The share sale agreement will be satisfied via internally generated funds and bank borrowings.

“This proposed acquisition enables Titijaya to immediately gain access to 75.44 acres of prime land within the high-growth and fast maturing central development spine of Sabah. The land is situated in the prime area of Sabah, strategically located near notable local landmarks such as The Bank Negara Building, Royal Malaysia Custom, Bukit Padang Hospital, Sabah Golf & Country Club, among other buildings of local major government bodies,” said Tan.

He added that The Shore takes up just 1.82 acres of the total 75.44 acres of land that the group has acquired from the vendors.

Thus, Titijaya and CREC are both keen to explore the possibilities of further collaborations in the property development scene in Sabah, to establish more new landmarks in the state.