A joint development between Pinang Sutera Sdn Bhd (PSSB) and Puncak Hartamas Sdn Bhd (PHSB) involving one parcel of freehold land in Batu Pahat, Johor has been mutually terminated, four years after inking the joint venture agreement (JVA).

PSSB is a 60 percent-owned subsidiary of Fiamma Development Sdn Bhd, which in turn is a wholly-owned subsidiary of Fiamma Holdings Bhd.

In 2017, Fiamma had teamed up with four landowners to develop residential properties on a total of 1.67 hectares in Batu Pahat, that have a potential gross development value (GDV) of RM26 million.

PSSB had entered into a JVA dated November 28, 2017, with the four landowners, who own a quarter each of the 1.67-hectare plot of land.

Fiamma told Bursa Malaysia last week that PHSB and PSSB had mutually agreed to revoke, rescind and terminate the JVA, for the joint development of the land.

“The Board of Directors of Fiamma is of the opinion that the mutual termination is in the best interests of the company,” it said.

Fiamma did not indicate why the JVA had been terminated.

Back in 2017 when the JVA was announced, both PHSB and PSSB had intended to build 24 units of double-storey semi-detached houses with an estimated built-up area of 2,700 square feet each in two phases.

Fiamma said Phase 1, comprising 16 units, was expected to commence in November 2017 and Phase 2, consisting of eight units would start in September 2018. The estimated completion date for each phase would take 18 months.

The company expected a 30 per cent gross margin from the project, which had an estimated development cost of RM14.5 million.

Under the agreement with the landowners, PSSB was to pay RM5.4 million to them for the right to develop the land, as well as for the development order and building plan approval that the landowners had to secure.

Fiamma expected the proposed joint development to be completed within the next five years.

In an announcement dated July 27, 2017, Fiamma said the building plan for Phase 1 was approved on June 2016 and October 31, 2016, whereas it was still waiting for approval from the relevant authorities for Phase 2.

Despite the aborted deal, Fiamma is consistently looking for suitable land banks in strategic growth areas across the country for residential and commercial developments, its website showed.

The company currently has two developments in Johor – Taman Kota Jaya in Kota Tinggi, and Taman Suria Permai in Batu Pahat. The develoFuture projects include building serviced apartments in Jalan Yap Kwan Seng and Jalan Sungai Besi, Kuala Lumpur. The company had acquired the land in Jalan Yap Kwan Seng and Jalan Sungai Besi in 2007 and 2015 respectively.

Source : SHAREN/New Straits Times, 28 June 2021.


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