Kompleks Sukan PKNS in Kelana Jaya, Selangor will be redeveloped jointly by Melati Ehsan Holdings Bhd and PKNS Holdings Sdn Bhd into a RM1.623 billion mixed commercial development.
In a filing to Bursa Malaysia on Friday, Jan 28, Melati Ehsan said its unit Bayu Melati Sdn Bhd had on the same day entered into a joint venture agreement for the proposed proposed development of three pieces of freehold commercial lands, collectively having a land area of 75,473 sq m, with the sports complex on it.
"The proposed development entails the construction, completion and sale of two blocks of serviced apartments, a block of SoHo offices, a sports complex, two blocks of office tower, a shopping mall, a hotel, a performing arts centre and car park lots on the land, together with infrastructure and landscaping to be carried out by Bayu Melati in accordance with the terms and conditions of the joint venture agreement," it added.
The gross costs value of the development is estimated at RM1.07 billion subject to changes as bayu Melati may propose improvements to the building and layout plans, design, building works and other features of the development.
The project will be funded by Melati Ehsan's internally generated funds and/or borrowings.
"As consideration to PKNS Holdings for the land, Bayu Melati shall pay to PKNS Holdings out of its own financial resources and/or financing, 70% of the total projected gross profits from the actual sales value of the development as determined by the terms of the joint venture agreement or RM387 million, whichever is higher and the surrender of the sports complex and performing arts centre upon completion.
"The proposed joint venture is an excellent opportunity for Melati Ehsan to embark on a new mixed commercial development to capitalise on the existing demand for such properties within the popular Kelana Jaya area where it does not possess any land bank. The track record and corporate image of the joint venture partner and its holding company is expected to enhance the saleability of the properties in the development project. It is expected to contribute to the medium and long term profitability of the group," it noted.- EDGE.COM