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Monday, May 9, 2011

Bertam Alliance inks deal for RM400m mixed development project

KUALA LUMPUR: BERTAM ALLIANCE BHD’s unit has inked a joint development agreement for a mixed development project of residential and commercial shoplots in Johor with a gross development value (GDV) estimated at no less than RM400 million.

In a statement Monday, May 9, Bertam said its wholly owned unit UH Capital Sdn Bhd had entered into an agreement with GJH Development Sdn Bhd for the joint development of 270 acres of land at Mukim Seroh in the district of Ledang in Johor.

UH Capital owns the land, and GJH is the developer.

Bertam said the land would be developed in two phases and the planned joint development was expected to commence upon receiving approval from the relevant authorities, with completion expected within six years.

It said all the costs and expenses to be incurred in relation to the proposed joint development would be borne and paid by the developer.

Bertam said that under the agreement, the developer guaranteed that the GDV for the two phases shall be not less than RM200 million each, and that the landowner’s entitlement would be no less than RM40 million for each phase.

On the rationale for the agreement, Bertam said the proposed joint development would allow it, through UH Capital, to unlock the value of the land without having to fund the development cost of the project.

“Furthermore, there will be general cost savings arising from the interest savings from bridging loans, which would have been required if UH Capital were to develop the lands on their own,” it said.

As for the funding of the project, Bertam said UH Capital was not required to finance the development and that GJH shall be solely responsible to meet and defray the development costs in the implementation of the project.

By The EDGE Malaysia

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