What’s Up? … dated July 2011
It got the approval to undertake a mixed development spread 102.56 acres on Penang island. The Penang Development Corporation (PDC) had approved the purchase and development of the land in Bayan Mutiara, near the Penang Bridge . Of the 102.56 acres 67.56 acres are existing land and 35 acres are to be reclaimed for a proposed mixed development. The site is at the coast way of the Tun Dr Lim Chong Eu Expressway to the north of Techware Sdn Bhd’s Gold Coast Development.
Ivory and its partners will have to pay PDC about rm1 billion over five to eight years as the land is being developed. Ivory is in discussions with certain parties to become co-developers of this project. In addition to managing the development, Ivory will also undertake the construction work.
The company will manage construction on the land but it intends to outsource the reclamation works at sea. Ivory will pay cash for the reclamation works and will not swap the valuable land as payment in kind.
While the land will cost about rm1 billion or rm240 psf, the gross development value for the project is estimated at rm10 billion over five to eight years. That would generate sales of about rm1.2 billion a year on average if the project is completed in eight years,
Ivory is targeting sales of about rm600 million to rm700 million in 2011 from its existing projects.
The land cost for Nayan Mutiara is a significant sum for Ivory as its shareholders’ funds are only rm200 million and its total market value is about rm220 million. Besides having co-developers, it will consider a corporate exercise to raise funds. It will also need a syndication of bank borrowings.
Ivory’s equity and borrowings will enable it to pay PDC for each parcel of land as it gets vacant possession of it prior development in a form of bridging finance.
There is no need to allow more time for settlement of the reclaimed land. The 67.5 acre tract was reclaimed by PDC some years ago and there are already houses built on adjacent land that was reclaimed by PDC at the same time.
Ivory will mainly build condominiums on the land as it is too expensive for landed property.
Ivory and its partners will have to pay PDC about rm1 billion over five to eight years as the land is being developed. Ivory is in discussions with certain parties to become co-developers of this project. In addition to managing the development, Ivory will also undertake the construction work.
The company will manage construction on the land but it intends to outsource the reclamation works at sea. Ivory will pay cash for the reclamation works and will not swap the valuable land as payment in kind.
While the land will cost about rm1 billion or rm240 psf, the gross development value for the project is estimated at rm10 billion over five to eight years. That would generate sales of about rm1.2 billion a year on average if the project is completed in eight years,
Ivory is targeting sales of about rm600 million to rm700 million in 2011 from its existing projects.
The land cost for Nayan Mutiara is a significant sum for Ivory as its shareholders’ funds are only rm200 million and its total market value is about rm220 million. Besides having co-developers, it will consider a corporate exercise to raise funds. It will also need a syndication of bank borrowings.
Ivory’s equity and borrowings will enable it to pay PDC for each parcel of land as it gets vacant possession of it prior development in a form of bridging finance.
There is no need to allow more time for settlement of the reclaimed land. The 67.5 acre tract was reclaimed by PDC some years ago and there are already houses built on adjacent land that was reclaimed by PDC at the same time.
Ivory will mainly build condominiums on the land as it is too expensive for landed property.
No comments:
Post a Comment