KUALA LUMPUR (July 5): LBS Bina Group Bhd has partnered with a land owner to jointly undertake a RM1 billion gross development value (GDV) mixed development in Sungai Penchala, Kuala Lumpur.

The development will be carried out atop six parcels of land measuring 6.97 acres, owned by Saga Tunas Sdn Bhd, in phases over a five-year period, said LBS Bina in a bourse filing.

“The development land is strategically located within notable landmarks such as Empire Damansara, IKEA Damansara, eCurve, Bandar Utama, Mont'Kiara and Sri Hartamas,” the property developer said, adding that it is 8km and 7km away from Mont'Kiara and Sri Hartamas respectively.

LBS Bina said its indirect wholly-owned subsidiary Sejuta Bina Sdn Bhd inked an agreement with Saga Tunas on Wednesday (July 5) for the joint development.

It said Saga Tunas is also a property developer, and its director and shareholder Datuk Azizulkhir Abdul Wahab is also a director and shareholder of four of LBS Bina's indirect subsidiaries.

LBS Bina said the development will be funded via a combination of internally generated funds and bank borrowings.

The group did not disclose any further details on the mixed development.

Touching on the terms of the agreement, LBS Bina said Saga Tunas is entitled to a cash consideration of RM67 million — forming part of the land cost and 10% gross profit generated from the development — upon completion of the project, while Sejuta Bina is entitled to all remaining sale proceeds.

The group said Saga Tunas’ entitlement was arrived at based on negotiations after taking into consideration an internal feasibility study on the development potential and prospects of the land, as well as the indicative valuation of the land.

Shares in LBS Bina ended half a sen or 1.14% lower at 43.5 sen on Wednesday, giving the group a market capitalisation of RM674.68 million.