Mah Sing Group Berhad’s wholly-owned subsidiary, Grand Pavilion Development Sdn Bhd entered into a Joint Venture Agreement (JVA) with Asie Sdn Bhd and its wholly owned subsidiary Usaha Nusantara Sdn Bhd for the joint development of approximately 4.08 acres of prime land along Jalan Tun Razak-Jalan Pahang.

The joint venture land forms part of the largest privatized urban regeneration project in Kuala Lumpur whereby Asie has been granted full rights of and approvals for a mixed development comprising residential and commercial properties and community, leisure, recreation and infrastructure facilities on 15 parcels of development land together with 5 air rights in Precinct 2-Pekeliling of the River Corridor Development under the Blue Corridor policy of Kuala Lumpur City Plan 2020.

Previously the former Tunku Abdul Rahman flats or more commonly known as the Pekeliling flats area, the joint venture land is ready for immediate development as demolition works, soil investigations and partial earthworks have been completed.

With an estimated total gross development value (GDV) of approximately RM9billion, this sizable 58acre land slated for urban regeneration is even bigger than the entire Mid Valley City.

It is set to be a new riverside garden city under the River of Life river beautification programme which is designed to unlock the potential of the land along both sides of the river corridor.

For this first joint venture, Mah Sing intends to develop a niche development named M Sentral with an estimated gross development value of approximately RM900 million.

M Sentral shall comprise smaller sized and more affordable serviced residences as there is strong demand due to lower entry prices, as well as some retail units.

There is also a provision for a sky bridge’s connection to the balance of the 58acre land, in line with the understanding that Mah Sing may be the potential joint venture partner for other parcels within the land subject to terms and conditions to be mutually agreed upon.

Given Mah Sing’s strong execution track record, similar concept and arrangements for other parcels of land under this privatized urban regeneration plan can be worked out as both parties continue to establish a strong relationship.

As part of a mega urban regeneration project under the auspices of the Entry Point Projects, there is significant upside potential for M Sentral and the remaining landbank.

Under the JVA, Usaha Nusantara will grant Grand Pavillion the sole and absolute right to undertake the development of the land for an entitlement of RM106.60 million to be settled via 60% in cash (RM63.96million) and 40% stake in Grand Pavillion.

Mah Sing shall continue to have 60% shareholding in Grand Pavillion.

Mah Sing’s group managing director/group chief executive Tan Sri Leong Hoy Kum said, “Acquisition of strategically located land is part of our growth strategy, and urban renewal projects allow access to prime land in the city centre.

“M Sentral is just the beginning as we would like to take part in more urban regeneration projects by both the Government and the private sector. This renewal project is a comprehensive redevelopment to encourage the community to live, work and play in the city centre.”

Subject to authorities’ approval and fulfillment of conditions precedent, the proposed development is expected to commence by the first half of 2012 and to be developed over a span of 5 years.

Awareness programme and registration of interest for M Sentral are expected to commence in the second half of 2011.