PETALING JAYA: Sunway Bhd has entered into a privatisation agreement with Perbadanan Kemajuan Negeri Selangor (PKNS) to accept the rights to develop 9.45 acres of leasehold land in Sungai Buloh, Selangor via its subsidiary, Sunway PKNS Sdn Bhd with a gross development value of RM544 million.
According to its filing with Bursa Malaysia, Sunway shall pay PKNS a rights value of RM36.6 million and revenue share of RM50 million or a sum equivalent to 8.88% of the gross value sales of the development of the land, whichever is higher.
Sunway also has to pay a portion of the profit before tax from the proposed development of a sum of RM38 million as PKNS is a shareholder holding 40% in Sunway PKNS.
The consideration on the proposed development will be funded through internally generated funds of Sunway PKNS.
The proposed development will comprise mainly serviced apartments with some lifestyle retail units. The project is expected to be completed within five years.
Sunway noted that the proposed development will add 9.5 acres of land to the group’s landbank, providing further visibility to the its future earnings.
Sunway is upbeat on the future prospects of the development as the land is located in Kota Damansara with retail amenities in Sunway Giza, Sunway Nexis and IKEA Damansara, education institutions like Sri KDU and SEGi University and healthcare provider, Thomson Hospital.
“Based on the proximity, Sunway believes that the proposed development will be attractive to potential buyers,” it said.
At 2.45pm, Sunway’s share price gained 0.6% to RM1.69 with 817,000 shares changing hands.
