Thursday, 4 May 2017

(The Edge) SHL partners Japan’s Marubeni to develop RM327m condo project

KUALA LUMPUR: SHL Consolidated Bhd is partnering Japanese general trading firm Marubeni Corp to develop a condominium project with an estimated gross development value of RM327 million in Bandar Sungai Long, Selangor.

Marubeni is one of Japan’s largest general trading fi rms that is listed on the Tokyo Stock Exchange, said SHL, with a market capitalisation of around ¥1.204 trillion (about RM46 billion) as at market close yesterday.

SHL told Bursa Malaysia in a fi ling that the partnership is being undertaken via its wholly-owned unit Sin Heap Lee Development Sdn Bhd (SHL Development), which has inked a joint-venture (JV) agreement with Marubeni’s own unit, MC Chance Malaysia Sdn Bhd (MCCM).

The two parties will incorporate a JV company (JVCo) in which SHL Development will take up a 67% stake, while MCCM holds 33%, to take on the project after acquiring the plot from a unit of SHL Development for RM50 million.

This will entail an initial subscription of 402,000 shares in the JVCo by SHL Development for RM402,000, with MCCM putting in RM198,000 for 198,000 shares within three days from the incorporation of the JVCo.

SHL Development and MCCM will then up their shares in accordance with their stakes, which would result in the former owning 120.6 million shares for RM120.6 million in total by April 30, 2018, with the latter having 59.4 million shares for RM59.4 million.

The project will be funded via share subscription by the two parties, with SHL Development financing its share of equity participation in the JVCo through internally generated funds, said SHL.

The project, comprising 568 condominium units, will be located on a 9.56-acre (3.87ha) plot in Seksyen 5 of Bandar Cheras, Daerah Ulu Langat, which SHL said is close to the Sungai Long Golf & Country Club, Universiti Tunku Abdul Rahman and the Sungai Long Medical Centre.

The project is expected to take off this month, and will be completed in March 2020. “In addition, the JVCo will undertake market research on housing demand in the Asean region, with potential of engaging in property development projects in the region,” added SHL.

SHL expects the new partnership to contribute positively to its future earnings, with sales secured via the JVCo.