KUALA LUMPUR: DPS Resources Bhd's (DPRB) subsidiary, Shantawood Sdn Bhd (SSB) inked a joint venture agreements with Rembia Properties Development Sdn Bhd (RPD) for a mixed development project that has a gross development value (GDV) of RM150 million.
The project will on four pieces of freehold lands measuring approximately 10.49 hectare in Alor Gajah, Melaka.
DPRB group managing director Edward Sow Yuen Seng said the joint venture represents an opportunity for the company to build up its landbank and ensure sustainable growth for the the company over the next few years.
Sow said the plan for the joint venture is for a mixed development project with a gross development value (GDV) of around RM150 million targeting the medium and affordable market segment.
"We are confident that the mixed development property will attract interests among home buyers and property investors as Krubong Land nearby Alor Gajah is situated in a mature location.
"Aside from that, the land is also ready for development, which would help to escalate our development and construction works," he said.
A filing with Bursa Malaysia today shows that RPD will be entitled to RM19 million from the development of this project.
This will be paid within seven years' repayment period until February 25, 2028.
This is based on the net book value (NBV) of the land of RM15.54 million as of July 31, 2019, as well as the future potential development value of the land.
Sow said the joint venture is seen as a synergistic collaboration for DPRB Resources given the company's existing exposure in Melaka's property market.
"Given our existing property development in Melaka, this joint venture fits into our expansion plan.
"Aside from that, the property outlook market in Melaka is anticipated to recover gradually in 2021 with the allocation of funds from the state government to spur economic activities within the state," Sow said.
SSB has an issued and paid-up share capital of RM100 million and is principally engaged in the manufacture of furniture and roof truss, provision of kiln-drying services and trading in furniture and carrying on business on real property and housing development-related services.
Whereas RPD is engaged in the real estate activities with lease or own properties.