Thursday, 26 December 2013

Tambun: Second Try

Tambun Indah has just announced that its Pearl City Business Park is "set to open an international school campus in mid-2015".

Tambun Indah will spend about RM38mil to design and construct an 8-acre campus in its Pearl City Business Park and will lease it to GEMS Maju Sdn Bhd, who is the operator of GEMS International School in Malaysia, for 30 years.

       Pearl Avenue @ Pearl City

With the termination of MoU with SIS International School earlier still fresh in mind, will this one get through this time?

There is no mention in the announcement whether any type of agreement has been signed between both parties. Is it an MoU or confirmed deal?

The construction of the campus is targeted to start in early 2014 and completed by mid-2015. Student intake is expected to commence from September 2015. This campus can accommodate up to 3,000 students.

The rental of the campus will be 8% of the construction cost plus 4% land value for the first 8 years. This translates into RM3.5mil rental a year or an attractive 7% yield. From the ninth year onward, there will be a step-up of 2% annually.

GEMS Maju is a joint venture between GEMS Education and Maju Holding, the latter is one of the largest private conglomerate in Malaysia. Though not listed, Maju is the major shareholders of some listed companies such as Ipmuda, Kinsteel & Perwaja.

GEMS Education which was founded since 1959, is said to be the largest private sector kindergarten to grade 12 education provider in the world. It offers British Curriculum programme and has a huge presence around the world. 

If this deal goes through, it will be GEMS's first in Malaysia. In the meantime, Penang mainland will also get its first International School.

This new development should be positive to Tambun Indah as it may attract more buyers and investors to its Pearl City development.

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