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Thursday, January 28, 2010

Sime Darby Prop eyes more tie-ups

PETALING JAYA: Sime Darby Property Bhd is in discussions with a few potential partners for possible joint ventures (JV) to develop its vast land bank in the country.

The company has a land bank of 37,000 acres, of which 8,000 acres are in the Guthrie Corridor, according to managing director Datuk Tunku Badlishah Tunku Annuar.

“It is the company’s strategy to team up with strategic partners to develop the land bank.

“Besides the advantage of sharing the expertise and knowledge, it will also allow us to realise the value of our land in a shorter time,” Tunku Badlishah told StarBiz yesterday.

He said the company’s first JV was with the Brunsfield group.

The 60:40 JV, with Sime Darby Property holding 60%, was established in 2006.

It has undertaken three projects to date – the RM250mil Subang Avenue, the RM550mil Oasis Damansara and the redevelopment of Oyster Cove, one of the most exclusive waterfront resorts on Australia’s Gold Coast.

On Tuesday, Sime Darby Property signed a 50:50 JV agreement with Sunrise Bhd to undertake a RM1bil integrated commercial property project in Bukit Jelutong, Selangor.

To be launched and developed in five phases from 2011, the commercial development on 21 acres will have a total built-up area of 2.7 million sq ft, consisting of retail lots, shop offices, office suites and serviced apartments.

On the latest JV, Tunku Badlishah said the partnership would pave the way for the sharing of expertise and know-how between Sunrise and Sime Darby Property.

“We see a strong synergistic alliance with Sunrise. While we have successfully build the residential component, Bukit Jelutong still lacks in its commercial offering.

“Sunrise’s expertise in commercial development will come in handy to further add value to the whole project,” he added.

Launched in 1996, Bukit Jelutong is an upscale residential enclave in Shah Alam which is home to 25,000 residents now.

ECM Libra property analyst Bernard Ching noted that while the existing township consisted mainly of terrace, semi-detached and bungalows, there was no significant high-rise residential and commercial development.

“As such, we believe there is a captive market for the product offerings proposed by the JV.

“Sunrise’s expertise in commercial development and high-rise residential projects is a good fit to bring in. It is very likely that the Bukit Jelutong project will be lifestyle-oriented, which is still largely absent in Shah Alam,” Ching said.

“With this tie-up, Sunrise will have the opportunity to replicate its success in developing Mont Kiara in another prime location,” he added.

Hwang DBS Vickers Research property analyst Yee Mei Hui said the JV would be a win-win situation for both partners as they could tap on each other’s strength and expertise.

“If it turns out well, this may be the start of more partnerships between Sime Darby Property and other property players,” she added.

By The Star

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