Encorp, Sinmah Capital to jointly develop RM865m mixed development project in Malacca

PETALING JAYA: Encorp Bhd and Sinmah Capital Bhd (SCB) will jointly develop 77.9 acres of the Bukit Katil land in Malacca into a mixed development consisting of a medical college, hospital and residential properties.

In a statement today, Encorp said the total estimated gross development value (GDV) for the proposed mixed development is RM865 million.

The group said its indirect wholly-owned subsidiary Encorp Bukit Katil Sdn Bhd (EBKSB) has entered into a joint venture and shareholders agreement (JVSA) with Sinmah Development Sdn Bhd (SDSB) and Sinmah Development JV Sdn Bhd (SDJSB).

SDSB is a wholly-owned unit of SCB, formerly known as Farm's Best Bhd, while SDJSB is a JV company set up to carry out the development project.

EBKSB and SDSB hold 70% and 30% stake respectively in SDJSB.

Encorp noted that this synergistic collaboration will allow each party to tap into each other's strengths and expertise and unlocking the value of the land, noting SCB has vast experience in the property development scene in Melaka and has completed a number of property projects in the state.

In addition, Encorp said the proposed JV would enable the group to commence the development of the Bukit Katil land without incurring massive capital outlay.

Meanwhile, the group said the JV company will acquire the development rights for the 77.9-acre land for RM69.7 million, in which it will be responsible to develop the land into a proposed mixed development consisting of commercial units and residential properties.

It said the commercial segment, which comprise 57.9 acres of land, shall include a medical college and hospital, while the remaining 20 acres residential project shall include bungalows, semi-detached houses and link houses.

Encorp said the cash proceeds from the sale of the land development rights to SDJSB will be utilized by the group for the payment to Federal Land Development Authority (Felda) for the development rights for the 640.9 acres Bukit Katil land.

"The management of Encorp is delighted and excited by the proposed JV as this marks the first project to kick off the development for the 640.9 acres Bukit Katil development.

"Encorp management is positive the residential project under the JV will be well received when they are launched given the strategic location of Bukit Katil, further boosted by the development of medical college and hospital in the area," it added.

Encorp added that the board remains positive on its outlook as management is working continuously to secure new contracts for its construction management and facilities management division and at the same time finalizing further details with other strategic partners for the Bukit Katil development.

Barring any unforeseen circumstances, the proposed JV is expected to be completed in the fourth quarter of 2017, it added.