UDA in joint venture to redevelop Pulau Jerejak resort

PETALING JAYA: UDA Holdings Bhd has entered into a joint-venture agreement with Q Islands Development Sdn Bhd (QID) to redevelop Jerejak Rainforest Resort & Spa and 80 acres of land surrounding it into a mixed development which will have a bridge linking Pulau Jerejak to the main island, 1,200 residential units and a theme park, among others.

The plan also includes a marina, four- and five-star hotels and a 11.5km cycling track.

The redevelopment master plan has already been approved by the Penang government and redevelopment work is expected to start in the fourth quarter of 2017 and completed within eight to 10 years. UDA did not disclose the redevelopment cost of the property.

The resort was closed in May this year after accumulating “heavy losses” since establishment in 2004.

In a press statement released yesterday, UDA said it will ultimately own 100% of Tropical Island Resort Sdn Bhd upon completion of the novation agreement to ensure the successful transformation of Jerejak Rainforest Resort & Spa into an attractive tourist destination, which at the same time would involve other real estate activity.

Tropical Island was initially a joint-venture company between UDA and the Penang Development Corp (PDC). It is not known when PDC exited the company and at what price.

Filings with the Companies Commission of Malaysia show that Tropical Island Resort registered a net loss of RM3.34 million for the financial year ended Dec 31, 2015.

This was on top of negative reserves to the tune of RM39.818 million and liabilities at RM53.48 million, outweighing assets by RM8.319 million.

While it is not clear if QID will be pumping in much-needed cash into the exercise, UDA said Q Island is expected to rebrand the operations, enhance the value and turn the loss-making property back into profitability.