SP Setia unit develops housing project for DBKL, gets RM1.19b Cheras land in return

PETALING JAYA: S P Setia Bhd's 50% jointly controlled entity Retro Highland has entered into a privatisation agreement with the Kuala Lumpur City Hall (DBKL) for the construction of the Quality Sustainable People Housing (QSPH) project in Cheras.
In return, Retro Highland will be awarded with 52.25 acres of leasehold land in Cheras valued at RM1.19 billion, to be used for mixed development with an estimated gross development value (GDV) of RM11.03 billion and a development period of 11 years.
The agreed value of the exchange land of RM1.19 billion comprises the construction cost for Phase 1 and Phase 2 of up to RM344.79 million and RM835.12 million, respectively; cash consideration of RM14.99 million; and if the construction cost of the QSPH development is lower than the estimated cost, an additional cash consideration for the difference will be paid to DBKL accordingly.
Retro Highland is a special purpose vehicle for S P Setia and Tradewinds Corp Bhd to undertake the privatisation project.
SP Setia said the QSPH project is a public-private strategic partnership undertaking, which is in line with the government's intention to encourage the private sector to form partnerships with DBKL to undertake urban renewal initiatives under the KL Structure Plan 2020.
The QSPH project consists of 3,971 residential units, 112 shop/stall units, a market and other public facilities. It is expected to be completed by 2028.
Despite having recently acquired large tracts of land bank via the acquisition of I&P Group Sdn Bhd, SP Setia said it is an opportunity for it to increase and replenish its current land bank in key areas of Kuala Lumpur via the privatisation agreement.
It said the proposed development is expected to contribute positively to the group's future earnings in the medium- to longer-term. The group will benefit from the developments surrounding the exchange land with amenities, facilities and infrastructures that are readily available in the vicinity.
At 2.45pm, SP Setia's share price was down 6 sen or 2% to RM2.96 on some 162,600 shares done.