News & Articles A new player has emerged in the real estate sector with maiden project in Kedah
A new player has emerged in the real estate sector with maiden project in Kedah
24 Sep 2021
LFE Corporation Bhd, a company that specialises in building construction, mechanical and electrical engineering, is expanding into property development and will begin work on its first housing project in Kedah.
The company's 60 per cent-owned subsidiary, LFE Development Sdn Bhd (LFEDSB) has signed an unincorporated joint venture development agreement (JVDA) with the land owner, Aziho Trading Sdn Bhd.
According to LFE in a stock exchange filing, the proposed property development venture will reduce the company's reliance on a single business segment and provide an additional revenue stream in the future.
Taman Residensi Mesra Phase 2 will be developed on 8.17 hectares with a gross development value of RM111.03 million.
The project consists of 422 single-storey terraced residences and 142 double-storey terraced dwellings, it said.
LFE stated in the filing that the entire gross development cost was RM86.15 million.
The project is expected to generate a total gross development profit (GDP) of roughly RM24.88 million, according to the company.
Over the project's lifespan, this would correspond to an average GDP of around RM10.49 million throughout the project tenure, it stated.
"Based on this, and assuming that LFEDSB is entitled to fully recognise the GDP throughout the project tenure, the project was expected to contribute more than 25 per cent of the LFE group's total net profit or cause a diversion of more than 25 per cent of its net assets moving forward," it said.
According to LFE, the two-and-a-half-year project will begin in the first quarter of 2022.
The company's 60 per cent-owned subsidiary, LFE Development Sdn Bhd (LFEDSB) has signed an unincorporated joint venture development agreement (JVDA) with the land owner, Aziho Trading Sdn Bhd.
According to LFE in a stock exchange filing, the proposed property development venture will reduce the company's reliance on a single business segment and provide an additional revenue stream in the future.
Taman Residensi Mesra Phase 2 will be developed on 8.17 hectares with a gross development value of RM111.03 million.
The project consists of 422 single-storey terraced residences and 142 double-storey terraced dwellings, it said.
LFE stated in the filing that the entire gross development cost was RM86.15 million.
The project is expected to generate a total gross development profit (GDP) of roughly RM24.88 million, according to the company.
Over the project's lifespan, this would correspond to an average GDP of around RM10.49 million throughout the project tenure, it stated.
"Based on this, and assuming that LFEDSB is entitled to fully recognise the GDP throughout the project tenure, the project was expected to contribute more than 25 per cent of the LFE group's total net profit or cause a diversion of more than 25 per cent of its net assets moving forward," it said.
According to LFE, the two-and-a-half-year project will begin in the first quarter of 2022.
Source: nst.com.my