KUALA LUMPUR (June 16): Real estate developer Jiankun International Bhd is reviving its redevelopment project of Kampong Bharu, Kuala Lumpur, citing the improved property market outlook following the reopening of the economy.
The group said it signed an agreement with Menara Rezeki Sdn Bhd (MRSB) on Thursday (June 16) to undertake the project via their joint venture (JV) firm, Menara Rezeki Properties Sdn Bhd (MRPSB).
Under the proposed redevelopment plan, there will be 52-storey apartment towers built for the existing owners of the Flat PKNS Jalan Tun Razak in Kampong Bharu, while Tower 1, Tower 2, and Tower 3 are mixed development with residential and retail units.
In a filing with Bursa Malaysia, Jiankun said it is acquiring a 70% stake in MRPSB for RM700,000, with the balance 30% to remain with MRSB.
"We are confident that the redevelopment project will be a success as the reopening of the economy will benefit the property sector," said Jiankun executive director and chief executive officer Edwin Silvester Das.
"It will also boost the group's plans to expand its property project while the redevelopment plan will also rejuvenate the Kampong Bharu area," he added in a statement.
Edwin said the venture is also consistent with Jiankun's objective of seeking various strategic alliances and JVs for synergistic benefits.
"This JV will be a launching pad for more successful collaborations between Jiankun, MRSB and MRPSB.
"We are excited with the potential growth and value add that we could bring to the community through our collaborations. Going forward, we will be able to work together on other property development projects that will be beneficial to all stakeholders," he said.
The project includes relocating existing residents to a new apartment that MRPSB will build and a comprehensive compensation will be offered to all existing residents.
According to Edwin, the relocation of existing residents is important as it enables the demolition of Flat PKNS Jalan Tun Razak to be done responsibly without affecting residents that are currently occupying the flats and lands.
This, he said, will also preserve the identity of the community as the existing residents will continue to stay in the new development.
Edwin said the redevelopment project signifies a new milestone for Jiankun as it is the largest property development project undertaken by the group.
On March 23, Jiankun said its failure to pay the first advance of RM2 million in time had led to the termination of its JV deal with MRSB for the redevelopment of Flat PKNS Jalan Tun Razak.
The earlier agreement, which was entered into on Jan 26, was for the redevelopment of the flats into a mixed residential and retail development with a gross development value of RM1.2 billion.
Jiankun's share price ended 2.27% or half a sen higher at 22.5 sen on Thursday, bringing a market capitalisation of RM52.6 million.