UEM Sunrise, Mulpha team up in RM5 bil development

KUALA LUMPUR (Feb 17): Property developer UEM Sunrise Bhd is teaming up with Mulpha International Bhd, to jointly develop three parcels of land in Nusajaya, Johor, which will have a combined gross development value (GDV) of RM5 billion.

The two groups yesterday entered into a partnership via their respective subsidiaries — UEM Land Bhd and Leisure Farm Corp Sdn Bhd. Under the deal, they will form a joint venture (JV) company where they are equal partners.

UEM Sunrise managing director and chief executive officer (CEO) Anwar Syahrin Abdul Ajib said the JV company will be developing the three parcels of land over a maximum period of 20 years.

Out of the three parcels, two measuring 129.79 acres (52.52ha) belong to UEM Sunrise. The land is located next to Mulpha’s Leisure Farm gated development, with development to be led by Mulpha.

The remaining parcel of 65.48-acre land, located near Gerbang Nusajaya, will be developed by UEM Sunrise.

“Leisure Farm offers something that no other development has, such as an equestrian club, a golf course and beautiful resort homes. We’re tapping into those advantages that Mulpha has brought to the area in order to benefit both parties,” said Anwar Syahrin.

“Likewise, Mulpha will be able to tap into the success of Nusajaya Tech Park, as well as future develoments such as the high-speed rail in Nusajaya,” he added.

Planning for the development will commence in the second half of 2016, with Phase 1 expected to be launched in 2018.

UEM Sunrise chief operating officer Raymond Cheah said the project will be divided into 12 phases, with the first phase to include superlink and semi-detached residential units for the land located nearer to Leisure Farm.

The commercial component featuring shophouses will be developed on the tract located near Gerbang Nusajaya under Phase 1. The total expected GDV for Phase 1 stands at around RM150 million, said Cheah.

“On the Gerbang Nusajaya side, it will likely be shophouses because we need to support the Nusajaya Tech Park. A lot of workers will be coming out from the industrial park.

“To support the industrial park, we also have affordable housing, which would provide synergy,” he said.

With the collaboration in place, Cheah said both UEM Sunrise and Mulpha will work together in sequencing their launches, to minimise cannibalisation between the two parties.

The latest JV follows the two companies’ maiden collaboration in May 2014, which saw UEM Sunrise’s and Mulpha’s respective subsidiaries Nusajaya Rise Sdn Bhd and Leisure Farm Corp Sdn Bhd building and upgrading three sets of roadworks in Iskandar Malaysia.

“This new JV reflects the increasing areas of collaboration between our two organisations and reinforces our commitment to long-term value creation through our continuous reinvestment in Iskandar Malaysia,” said Mulpha executive chairman Lee Seng Huang.

The two companies, together with Iskandar Investment Bhd and Sunway Iskandar Development Sdn Bhd, also collaborated on the development of the final stretch of the Coastal Highway Southern Link in September 2014.

UEM Sunrise shares closed up two sen or 1.6% to 96 sen yesterday, bringing its market capitalisation to RM4.36 billion, while Mulpha’s share price closed unchanged at 26 sen, valuing it at RM554.75 million.

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This article first appeared in The Edge Financial Daily, on Feb 17, 2016. Subscribe to The Edge Financial Daily here.