TWO listed units of Wing Tai Holdings have agreed to pool synergies in the hospitality and property management sector by forming a joint venture (JV) to acquire a 43-storey condominium in Kuala Lumpur, which will be jointly owned and operated as serviced apartments.
Bursa Malaysia-listed DNP Holdings on Wednesday entered into a joint venture and shareholders' agreement with Hong Kong-listed USI Holdings for the joint-venture company Kualiti Gold to acquire en bloc 115 condo units and a similar number of parking bays in a condominium block for RM139.75 million (S$60.3 million) cash. It will also have the option to purchase up to an additional 115 parking bays.
The total price of RM139.75 million based on a net floor area of 199,639 square feet (excluding the parking bays) was based on a calculation of RM700 per sq ft.
The block is part of an ongoing high-end condo and service apartment development of three blocks of 43-storey condos, one block of 4-storey service apartments, a 5-storey multiple-level carpark block, and a swimming pool, currently being developed by Starpuri Development, a wholly owned subsidiary of DNP.
The development is within the Kuala Lumpur Golden Triangle fringe and is in the initial stages of construction, with the completion of the condominium block in question expected to take about three years.
DNP and USI will have an equal share in Kualiti Gold, their subscription of new shares in the company to be wholly satisfied by cash totalling nearly RM250 million. The balance RM67.25 million after paying for the condominium and parking bays will be used to fund the optional purchase of an additional 115 parking bays and other expenses.
DNP believes the condominium 'will be able to generate consistent and recurring income in the future, including potential capital appreciation'.
A property investment company, Kualiti Gold is an existing wholly-owned subsidiary of DNP, but has been dormant since its incorporation in 1994.
Wing Tai Holdings has a 33.63 per cent indirect interest in USI; it also owns a 47.61 per cent direct and 7.65 per cent indirect interest in DNP.
The joint-venture shareholders' agreement is conditional on a number of terms, including the approval of Malaysia's Foreign Investment Committee.
