The JV entails two agreements — EcoWorld’s wholly-owned subsidiary Eco Grandeur Sdn Bhd entering a conditional share sale and purchase agreement to acquire 31 million shares or 50% equity stake in Cascara’s unit Jendela Hikmat Sdn Bhd for RM303.5 million, and a subscription and shareholders’ agreement to jointly develop the project land.
Upon completion of the share acquisition, EcoWorld will have access to three pieces of adjacent freehold lands which both parties agreed to value the lands at RM1.292 billion.
The land value of RM1.292 billion agreed by the both parties also represent a discount of RM3.48 million or 0.27% from Henry Butcher Malaysia Sdn Bhd, being the independent market valuer appointed by EcoWorld, who has valued the land at RM1.29 billion.
The amount of RM303.5 million represents 50% of adjusted net asset value (NAV) of the said lands. Ultimately, both parties will jointly invest and fund Jendela Hikmat as the JV vehicle to develop Eco Ardence.
The agreements were signed by EcoWorld president and CEO Datuk Chang Khim Wah and Cascara representative Mohammed Rashdan Mohd Yusof here, witnessed by EcoWorld chairman Tan Sri Liew Kee Sin and Jendela Hikmat chairman Tan Sri Che Md Noor Mat Arshad.
Interestingly, government-linked company Boustead Holdings Bhd and its major shareholder Lembaga Tabung Angkatan Tentera (LTAT) had only in the last few months sold their combined 60% stake in Jendela Hikmat to Cascara, which held the remaining 40%, for RM360 million.
Cascara Sdn Bhd is said to be a company controlled by Sarawak businessman Tan Sri Dato Bustari Yusuf and Ahmadi bin Yusoff.
The project is located in the vicinity of Bukit Raja, Bandar Setia Alam and Setia Eco Park. The latter two are multiple award-winning townships that helped build chairman Tan Sri Liew’s reputation as an industry leader when he was helming S P Setia Bhd.
"The project has 10 phases, and should be completed in 15 years. We are aiming to launch the first phase in the first quarter of 2017. We should be launching the landed residences first," Chang told reporters after the signing ceremony today.
Eco Ardence will comprise a good mix of landed bungalows, semi-detached houses and terrace houses along with integrated high, mid and low-rise residential and commercial units within a fully strata-titled gated and guarded environment.
Chang added that 40.43% of the township will be allocated for landed and high-rise residences, 5.62% for affordable housing, 14.7% for commercial properties, 10.31% for community facilities, 12.2% for green space and 16.4% for road and infrastructure.
He noted that while Eco Ardence will be a luxury development that boasts EcoWorld’s signature large roundabouts, landscaping and water features, it will also have mid-range and affordable homes.
Moreover, the township will cater for upgraders from the locality, not foreigners, he added.
"Eco Ardence's strategic location, large and relatively affluent population catchment will enable us to create a township with multi-generational appeal. We plan to have a good mix of luxurious and affordable landed homes for upgraders. There will also be innovatively designed apartments and well-conceptualised integrated commercial units," he said.
"We all know Shah Alam and Setia Alam are mature areas. There are many people living there for more than 10 years. Launching a luxury project is tough now but we believe the right product will always attract people," Chang noted.
Currently, the land is accessible by New Klang Valley Expressway (NKVE), Federal Highway and Klang via Jalan Meru.
He also said that the project was supported by infrastructural improvements such as the opening of the New Klang Valley Espressway (NKVE) link to Jalan Meru via Setia Alam, widening of Jalan Meru and improvements to surrounding access roads.
On rationale, EcoWorld said the proposed JV provides an opportunity for the Group to work together with Cascara to undertake the large-scale project, without over-extending its balance sheet.
"In addition, EcoWorld Project Management Sdn Bhd (EWPM) will be appointed as the development manager, and Jendela Hikmat as the joint venture vehicle will enter into a brand licensing agreement with EWPM to enable the proposed development to be marketed as an EcoWorld brand project," it added.
Jendela Hikmat is currently in the initial stages of development planning and is unable to ascertain the expected development cost required for the proposed township development at this juncture.
The announcement of the proposed Eco Ardence development comes just a day after EcoWorld disclosed a setback in developing its Eco Marina project in Batu Kawan, Penang with a GDV of RM10 billion.
Sheer driving pleasure awaits you as you enter Eco Ardence.
Location of Eco Ardence township.