New venture: The Fajarbaru headquarters in Petaling Jaya. Its development of MediCity in Batu Kawan, Penang, will be a long-term profit sharing agreement with PDC.
PETALING JAYA: Fajarbaru Builder Group Bhd
(FBG) has accepted a letter of offer from state-owned Penang Development Corp (PDC) to develop MediCity in Batu Kawan, Penang.
It is a proposed joint development project between PDC and FBG that will have a specialist hospital built on it with a long-term profit sharing component between the two parties.
Both parties will sign a master purchase and development agreement (PDA) at a future date, which is yet to be ascertained.
The project, which consists of two parcels of land, is planned for development on the freehold land of some 235.81 acres in Bandar Cassia, Mukim 13 in Batu Kawan.
FBG, in an announcement to Bursa Malaysia said it will fund and undertake the development of Parcel 1 land measuring 51.17 acres after purchasing it in 2025.
FBG will soon purchase the Parcel 1 land for a cash consideration of RM111.45mil, of which 10% of this amount will be paid upon signing of the Master PDA between the parties at a future date.
Meanwhile, FBG said it is given the right to purchase Parcel 2 of the land within 12 months from the date of the Master PDA.
Plans are for the Parcel 1 land to be developed into an urban enclave that integrates health and medical facilities with residential, retail and commercial components.
It will consist of a 200-bedded specialist hospital and other components that are related to health and medical sectors that will be identified later on – these will make up 30% of the total area of the Parcel 1 land.
The company said the remaining 35.8 acres of the Parcel 1 land shall be used for mixed development of residential and commercial components; and infrastructure construction.
The future possibility of purchasing the Parcel 2 land is subject to the market conditions and performance of the Parcel 1 development, FBG said.
FBG is to also pay PDC at a minimum rate of 15% or more of the estimated profit of the Parcel 1 land’s mixed development, it said.
They are to be paid in instalments and it includes the residential and commercial segments; and certain health and medical components that are to be identified in the Master PDA within eight years from the date of the agreement.
“Other salient terms and conditions include the completion and operation of the first hospital to be within five years from the date of the Master PDA. The entire mixed-use development of Parcel 1 land is to be completed and operational within eight years from the date of the Master PDA,” it said.
Further approvals are required from FBG’s shareholders in order to undertake this development, the company said.
