Under the terms of the JVA, Landowner shall allow Perquest to develop the JV Land in return for a total consideration of –
(i) RM300,000, which will be paid upon execution of the JVA;
(ii) 3 units of Shop Offices based on a market value of RM3,116,500 only to be constructed and completed by the Developer on the JV Land at Developer own cost and expenses;
(iii) 27 units of Apartment based on a market value of RM6,646,000 only to be constructed and completed by the Developer on the JV Land at Developer’s own cost and expenses; and
(iv) If the Developer constructs more than 7 units Shop Offices and/or more than 148 units of Apartments, the Developer agrees to give the Landowner additional payment/consideration calculated of the following manner:
a) For each additional Shop Office constructed on the JV Land, the Developer shall pay to the Landowner 38% of the sale price for each additional Shop Office;
b) For each additional Apartment constructed on JV Land, the Developer shall pay to the Landowner 18% of the sale price for each additional Apartment.
The above consideration was arrived at, after taking into consideration the prevailing market value and the development potential of the JV Land. The total estimated Gross Development Value is approximately RM37,500,000 (excluding Landowner’s units).
Currently, there are various squatters or occupiers occupying on the JV Land.
The JV Development is in line with the Tambun Indah Group’s plan to expand its property development activities particularly in Penang. It represents a strategic investment by the Company and is expected to contribute positively to the earnings as well as shareholders’ value of the Group in the medium to long term. The JV Development also represents a low entry opportunity for Tambun Indah Group in terms of upfront cash outlay, to develop a piece of prime property in Butterworth.
The JV Land is within the mature and popular Butterworth town and offers a high potential development in light of its strategic location with the federal roads and other infrastructure in place. The location is easily accessible to Raja Uda Light Industrial Park, Mak Mandin Industrial Park, Butterworth – Kulim Expressway and North-South Expressway.
The JV land is also within walking distance to Palm Villas and Seri Palma.
The population of mainland Penang is growing, partly due to migration from Penang Island because property prices are relatively cheaper in mainland Penang as compared to Penang Island and also influx of Foreign Direct Investment in industrial area in mainland Penang which create job opportunities. It is therefore expected that there will be an increase in the demand of houses in mainland Penang.