Sunway plans joint venture project with RM500m GDV

PETALING JAYA: Sunway Bhd plans to set up a joint venture with Huatland Development Sdn Bhd to acquire land in Wangsa Maju, Kuala Lumpur, for RM51.07 million to develop a mixed project comprising serviced apartments and retail units with a gross development value of RM500 million.

Sunway's wholly owned subsidiary Sunway City Sdn Bhd yesterday entered into a subscription and shareholders’ agreement with Huatland Development and Sunglobal Resources Sdn Bhd (JVCo), a wholly owned subsidiary of Sunway City, for the purpose of establishing a joint venture for the project.
The JVCo has also on even date, entered into a sale and purchase agreement with Setapak Heights Development Sdn Bhd for the acquisition of the land.
"The proposed land acquisition will add 4.34 acres of freehold land in Kuala Lumpur to Sunway’s landbank, providing further visibility to the future earnings of the group. The land is strategically located in the rapidly developing area of Wangsa Maju," Sunway said.
It added that preliminary development approvals have been obtained for the land with a plot ratio of five. Although the JVCo may modify the product mix approved, the development on the land is expected to be launch-ready by the second half of 2018.
The ability to launch this project early would improve the internal rate of return of the proposed development.The proposed development will have products with average pricing of RM550,000.
The proposed land acquisition and joint venture will be financed with bank borrowings and/or internally generated funds.
Sunway shares closed 0.72% lower at RM4.15 with 1.1 million traded.