MB World Group to develop RM176m apartment project in Johor Bahru
KUALA LUMPUR (June 25): MB World Group Bhd plans to develop a 6.26-acre land in Johor, a project that comprises 406 units of apartments worth RM176 million in gross development value, after securing the developmental rights to the land from its owner.
According to MB World, its wholly-owned MB Max Sdn Bhd has inked a development rights agreement with Shiya Sdn Bhd, which owns the freehold land that is made up of 76 plots in Sierra Perdana, Johor Bahru.
MB World said in a stock exchange filing today that it opted for the DRA as opposed to an outright land bank purchase, as the latter “will require significant cash outlay”. In granting MB World developmental rights and all claims to the land, Shiya will get a RM24 million entitlement from the deal.
Established on Oct 12, 1983, Shiya is a private civil contractor and building developer owned by two individuals: Aminah Mohamed (70%) and Mohd Isnin Md Latib (30%).
“This is consistent and in line with the group’s strategic direction to focus on property development activities to sustain its growth through acquisitions, joint ventures or other arrangements with land owners,” MB World said.
On the entitlement it is paying Shiya, MB World said it was on a “willing-buyer willing-seller” basis, after taking into account the development potential and prospects for the land.
“The surrounding area in the locality comprises ongoing and existing projects, including mixed residential, varied businesses, integrated commercial and retail centre, industrial and institutional users,” the filing said, adding that the land is easily accessible via the Tebrau Highway, Eastern Dispersal Link, Johor Bahru East Coast Highway and Jalan Sierra Perdana 6/2.
Going forward, MB World said its proposal to develop the land is expected to contribute positively to its future earnings.
“Any profit attributable to MB World Group would be realized in stages over the tenure of the project, based on the progress of the project,” the filing added.
Currently, MB World has eight ongoing projects in Johor. The group is controlled by its non-independent executive director Simon Sim Yow Yung via Kim Feng Capital Sdn Bhd, with a 70.24% stake.
Listed on the Main Market, MB World shares were untraded today. It last closed at RM1.85 for a market capitalisation of RM291.15 million.