Thursday, January 21, 2010

Sunway to buy 60% in Spanland

PETALING JAYA: Sunway Holdings Bhd, via wholly-owned unit SunwayMas Sdn Bhd, has signed a share sale agreement with Templer Forest Resort Sdn Bhd for the proposed acquisition of 60% equity interest in Spanland Sdn Bhd for RM13.8mil.

The agreement was signed on Tuesday by Sunway managing director Yau Kok Seng and Templer Forest managing director Datuk Kong Hon Kong.

Spanland has the development rights for a 98-acre plot in Gombak opposite the Templer Park Country Club. The site has been proposed for a project comprising 163 bungalows with an estimated gross development value (GDV) of RM500mil.

The three-storey bungalows with built-up areas of around 6,500 sq ft have an indicative price of RM3mil.

Sunway managing director Yau Kok Seng said with the proposed acquisition, Sunway’s land bank would be increased to 390 acres with potential GDV of some RM2bil.

The project is expected to be launched by October.

He said that for the financial year ending Dec 31, Sunway was targeting a 50% growth in its property sales and property development would contribute close to 25% of Sunway’s earnings.

The construction division is the biggest contributor at 45%; while the manufacturing, trading and building materials division contributes 20%; and quarrying activities the balance.

“Property development has big potential and we are looking to replenish our land bank via acquisitions and strategic alliances locally and regionally,” said Yau.

Yau sees good potential in Singapore’s property market and is confident of good response to its latest condominium development there. To be launched by the middle of this year, the project will comprise 500 condominiums in eight 12-storey blocks. The 1,100 to 1,300 sq ft units will be priced at around S$1,000 per sq ft for a total GDV of more than S$450mil.

Sunway has launched and sold two public housing projects under the design-build-sell scheme totalling close to 2,000 units in Boon Keng and Toa Payoh. With built-up areas of 1,100 to 1,300 sq ft, the units were priced from S$520 to S$540 per sq ft.

“There is huge potential in Singapore’s medium range housing market and we will be looking for more opportunities there together with our 70% joint-venture partner, the Hoi Hup Group,” Yau said.

Sunway is also looking to launch its maiden project in China in the second quarter this year. The condominium project in Jiangying near Shanghai will have a GDV of close to RM500mil.

The 26:39:35 project between Sunway, Sunway City Bhd and Guanghou, will pave the way for more projects in China.

In the Klang Valley, a mixed development on 111 acres will be launched in Sungei Long. The project will have GDV of more than RM550mil.

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