Eastern & Oriental Bhd (E&O) has completed the reclamation of Andaman Phase 1 and plans to begin the development of the 253-acre land over the next 15 years with an estimated gross development value (GDV) of RM17 billion.
The first property, The Meg, has been on the market since January 2022 and has a 100 per cent sales rate as of January 2023.
The Meg comprises two residential apartment blocks with about 1,020 units situated in the prime Tanjung Tokong area near Gurney Drive.
According to E&O, the reclamation for Andaman Phase 2 will take another three years to finish and will provide a future land bank for development.
"The group believes that Andaman Island will play a significant role in driving its growth trajectory in Penang in the coming years," E&O said.
Both Andaman Phase 1 and Phase 2 (also known as STP2) are part of Penang's broader multi-billion-ringgit Seri Tanjung Pinang (STP) development.
STP is a seafront development masterplan on the northeast coast of Penang island. The 240-acre first phase, Seri Tanjung Pinang Phase 1 (STP1), is fully reclaimed and close to completion.
Tanjung Pinang Development Sdn Bhd (TPD), in which E&O-PDC Holdings Sdn Bhd owns 30 per cent, holds the concession rights for STP reclamation and development.
Permaijana Ribu (M) Sdn Bhd, an E&O wholly-owned indirect subsidiary, owns the remaining 70 per cent ownership stake in E&O-PDC.
E&O controls E&O-PDC and proposes to purchase the remaining 40 per cent equity interest in the company from Penang Development Corporation (PDC) for RM46.95 million through its indirect wholly-owned subsidiary, Kamunting Management Services Sdn Bhd.
"The acquisition of 40 per cent shareholding in E&O-PDC from PDC will enable E&O to own 100 per cent in TPD where the main development activities for the group will be concentrated on over the next 30 years," E&O said in a stock exchange filing yesterday.
E&O said that the RM46.95 million purchase price was based on a willing-buyer, willing-seller premise and will be funded through a combination of internally generated funds, shareholder advances, and external borrowings.
The transaction is anticipated to close in December 2023.