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Thursday, July 7, 2011

MRCB lands good deal

Win-win deal: Construction workers at a site near the KL Sentral in Kuala Lumpur. OSK Research says the latest land deal will enable MRCB to expand its KL Sentral development projects.

PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) struck a good deal, getting two plots of land in return for constructing several public infrastructure projects in Brickfields.

OSK Research in a note yesterday said that it was not entirely surprised by the news given that MRCB had previously indicated that it had targeted several parcels of prime land in Klang Valley, including Brickfields for potential land acquisition.

“We view the agreement positively as it's in line with MRCB's strategy to boost its land bank and given that the exchanged land is located near its existing developments in KL Sentral,” it said.

It believes that the latest development will enable the group to expand its KL Sentral development projects.

To recap, on July 5, Country Annexe Sdn Bhd (CASB), a 70%-subsidiary of MRCB, would be given land in Kuala Lumpur with an estimated gross development value of RM1bil for undertaking three projects in the city's Brickfields area.

MRCB told Bursa Malaysia that CASB had entered into a privatisation agreement with the Government and Syarikat Tanah dan Harta Sdn Bhd for the construction of three projects in Kuala Lumpur.

The projects consist of Little India (upgrading and beautification of Jalan Tun Sambanthan, Brickfields), Pines Bazaar (a three-storey building consisting of office space, 28 units of stalls and 140 carpark bays) and Ang Seng Development (212 units of new government Class F quarters near Jalan Ang Seng to replace the quarters at Jalan Rozario).

DMIA Sdn Bhd owns the remaining 30% stake in CASB, which was set up as a special-purpose vehicle to develop the projects in return for two pieces of land at the intersection of Lorong Chan Ah Tong and Jalan Tun Sambanthan.

The 214,630 sq ft land is valued at RM601 per sq ft or RM129mil.

MRCB said a proposed mixed property development on the land represented a good investment opportunity to further strengthen the group's income in future.

Attempt to get comments from MRCB was unfruitful yesterday after it told StarBiz that its chief executive officer Datuk Mohamed Razeek Hussain was currently in overseas.

In June last year, the RM36.6mil Little India project was jointly awarded to MRCB and DMIA by the Government on a design, build, finance and transfer basis. It was completed last October.

To support the Government's initiatives for Greater Kuala Lumpur, the project was later expanded to include Pines Bazaar and Ang Seng Development.

By The Star

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