PETALING JAYA: Dijaya Corp Bhd and Ivory Properties Group Bhd shares were up after the companies announced a tie-up for a mixed-property project with a gross development value of RM10bil in Bayan Mutiara, Penang.

Dijaya rose 3.6%, or 5 sen, to RM1.44 while its warrants advanced 6.5%, or 3 sen, to 49 sen. Ivory Properties added 7%, or 7 sen, to RM1.07.

Dubbed Penang World City, the project will be undertaken by joint-venture vehicle Tropicana Ivory Sdn Bhd (TISB), which is 49% owned by Dijaya and 51% by Ivory Properties. TISB was set up on Oct 14.

Penang World City will be built on a 102.56 acre site, of which 35 acres is to be reclaimed. It will comprise residential units, a shopping mall, office suites, office towers, a hotel, retail spaces and an open mall with a boulevard.

The land is being bought for RM1.08bil from state-owned Penang Development Corp.

Bayan Mutiara is a new development hub in the eastern part of the Tun Dr Lim Chong Eu Expressway and is in the vicinity of Sungai Nibong.

Ivory Properties has proposed to finance the project via a renounceable rights issue of 186,000,000 new ordinary shares of 50 sen each as well as 186,000,000 new free detachable warrants.

Dijaya, meanwhile, will extend financial assistance to TISB in the form of shareholder advances, guarantee, indemnity or collateral of up to RM525.4mil, or 49% of the total consideration of the development land.

Analysts contacted by StarBiz have a positive view of the project, citing its prime location as a major plus factor.

“Land in Penang is scarce and the outlook for housing in the Bayan Mutiara area is booming,” an analyst said.

“It is not easy to get land in Penang for that price. Property developers prefer Johor Baru because land is much cheaper there.”

Another local bank-backed analyst said although he liked the land, he considered it pricey. At RM240 per sq ft, it was comparably higher than IJM Land Bhd’s land further north of the island that was purchased at RM50 per sq ft. IJM Land has a 150.24-acre mixed-development called Light Waterfront Penang.

The analyst also said the upside for Ivory Properties’ stock would be capped at around 30% as its share base would be diluted by two to three times following the rights issue.

He added that the choice of office towers in the development mix was surprising as the demand for office space in Penang was tepid.

Nonetheless, he said the project was still at its early stage and was subject to change.

“We haven’t seen a detailed breakdown of the development components yet but the residential portion is likely to be larger,” he said.

Penang World City is scheduled to be completed in eight years. Work on the first phase is scheduled to begin at the end of next year.

SOURCE: The Star

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GEORGE TOWN (Nov 13, 2011): The recently unveiled ‘Penang World City’ planned on reclaimed land south of the Penang Bridge with an estimated gross development value of RM10 billion is subject to Environmental Impact Assessment (EIA).

In asserting this, Chief Minister Lim Guan Eng also clarified that the beach along the land will come under the state while the project site is taken over by developer Ivory Properties Group Bhd.

Lim, who officiated at the signing ceremony for the purchase and development of the land between the Penang government and Ivory last Friday, was responding to a question on public concerns following a spate of reclamation projects in the state.

“The EIA must be complied with, there will be no exemption,” he said, commenting on reports that the hydroflow in the seas around Penang may be affected by the reclamations.

He also said that the units on the reclaimed land will be offered on freehold terms, but the beach along the land will be maintained under the state.

The development is to be undertaken in a joint venture between Ivory and Dijaya Corporation Bhd.

The two public listed companies formed Tropicana Ivory Sdn Bhd (TISB), with Ivory (through wholly-owned subsidiary Ivory Utilities Sdn Bhd) taking a 51% stake and Dijaya (through wholly-owned Tropicana Development (Penang) Sdn Bhd) holding the remaining 49%, for this project.

The project covers a land size of 41.5ha, of which 27.3ha is existing reclaimed land and 14.2ha has yet to be reclaimed. The cost for the remaining reclamation will be borne fully by Ivory.

The new project is planned to include luxury condominiums, medium-rise condominiums, business suites, services residences, iconic office block, waterfront entertainment hub, commercial and retail spaces, waterfront villas and medical facilities.

The agreement was signed by PDC general manager Datuk Rosli Jaffar, Penang State Economic Planning Unit deputy director (macro) Hafidzah Hassan who represented CMI, and Ivory chairman and Group CEO Datuk Low Eng Hock

Also present was Ivory deputy chairman and executive director Datuk Seri Nazir Ariff.

The land known as Bayan Mutiara had been earmarked by the previous Barisan Nasional (BN) state government for a “Mini Putrajaya” government administrative centre, but plans for these were deferred.

The Pakatan Rakyat state government, through its Chief Minister of Penang Incorporated (CMI), then last year entrusted the PDC to spearhead a new development project there.

PDC arranged an open tender through a Request for Proposal (RFP) exercise which ended on Dec 31, 2010. Three companies were short-listed.

Ivory was eventually awarded the tender with a price offering to pay RM240 per sq ft over five years to the state.

Lim said that the sale of land will enable the Penang government to generate revenue of approximately RM1.07 billion.

He stressed that contribution from the proceeds would be channelled towards the setting up of a RM500 million ‘Affordable Quality Homes Fund’ in the state.

“Among others, one of the locations identified for affordable quality housing is in Batu Kawan where 200 acres (81ha) has been earmarked to build about 15,000 units with prices ranging between RM 72,000 and RM 220,000,” he said.

Source: TheSunDaily

Penang World City, a mixed residential and commercial property project by  Tropicana Ivory Sdn Bhd on a 102.56 acre site in Bayan Mutiara, Penang. Comprises a mix of residential units, shopping mall, office suites, office tower, hotel, retail spaces and open mall with boulevard.

The development will be completed in eight years and work on the first phase is scheduled to begin next year.

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THE Penang Government is allocating RM500mil, generated from the sale of a 41.5ha prime site along the Tun Dr Lim Chong Eu Expressway on the island, to set up an Affordable Quality Homes Fund.

Chief Minister Lim Guan Eng said the allocation was consistent with the state government’s commitment towards ensuring that affordable quality homes were made available for Penangites.

“A location for such housing has been identified in Batu Kawan (on the mainland) where 80.9ha of land has been earmarked to build some 15,000 units with prices ranging between RM72,000 and RM220,000,” he said.

He said three companies were shortlisted during the open tender for the 41.5ha land, sandwiched between the Penang Bridge and the soon-to-be-completed second Penang bridge.

Ivory Properties Group Berhad (IPGB) was awarded the tender with its price offer of RM240 per sq ft over a five-year period.

Lim was speaking to reporters at the signing ceremony yesterday of the purchase and development agreement between IPGB and Chief Minister Incorporated (CMI) and Penang Development Corporation (PDC).

State Economic Planning Unit deputy director Hafidzah Hassan signed on behalf of CMI, while PDC general manager Datuk Rosli Jaafar represented PDC, and IPGB chairman and group chief executive officer Datuk Low Eng Hock signed for IPGB.

IPGB and its joint-venture partner Dijaya Corporation Berhad plan to develop a mixed-development project with an estimated gross development value of RM10bil that will be completed in eight years.

A joint-venture company Tropicana Ivory Sdn Bhd has been formed to undertake the project.

SOURCE: The Star