KUALA LUMPUR: SP Setia Bhd via its 50 per cent jointly controlled entity Retro Highland has entered into a privatisation agreement with Dewan Bandaraya Kuala Lumpur (DBKL) to undertake the construction of a Quality Sustainable People Housing (QSPH) project in Cheras.
In an exchange filing today, SP Setia said Retro Highland (also 50 per cent owned by Tradewinds Corp Bhd) signed the agreement for the planning, design, construction, completion and commissioning of the QSPH project.
The project entails construction of 3,971 residential units, 112 units of shops, a market and other public facilities.
“The QSPH development is in line with the government’s intention to encourage the private sector to form partnerships with DBKL to undertake urban renewal initiatives under the KL Structure Plan 2020.”
The privatisation agreement will be undertaken in two phases. Phase 1 involves development of 1,192 residential units, followed by phase 2 with 2,779 residential units, 112 shops, 244 lots of market and public facilities.
The company said the initial phases of the development will involve the renewal of the 3,971 units under Taman Ikan Emas cluster houses, Sri Melaka low cost flats, Sri Pulau Pinang low cost flats and long houses, Sri Johor low cost flats under the government’s public housing scheme, common facilities, shops, stalls and a market.
Phase 1 of the development will cost RM344.79 million, while phase 2 will cost RM835.12 million.
It said there will also be cash consideration of RM14.99 million, and if the construction cost of the development is lower than the cost estimated for both phases, an additional cash consideration for the difference will be paid to DBKL accordingly.
SP Setia said Retro Highland will also be awarded 52.25-acre of leasehold land (exchange land) in Cheras from DBKL, in return for the QSPH project development.
The property developer said the RM1.19 billion exchange land is planned for a mixed development project with a gross development value of about RM11.03 billion over 11 years.
SP Setia said the proposed developments are expected to be funded via bank borrowings and internally generated funds.
SP Setia said the exchange land will increase and replenish the company’s current land bank in key areas of Kuala Lumpur and allow the group to continue to strengthen its presence in the Klang Valley.