The Arden residential apartment : Kimlun Corp Bhd (KL:KIMLUN) is forming a joint venture company (JVco) with Singapore-listed Astaka Holdings Ltd’s (AHL) indirect 50.99%-owned unit Astaka Capital Sdn Bhd (ACSB) to develop a residential serviced apartment project in Johor Bahru.

  (July 12): Kimlun Corp Bhd (KL:KIMLUN) is forming a joint venture company (JVco) with Singapore-listed Astaka Holdings Ltd’s (AHL) indirect 50.99%-owned unit Astaka Capital Sdn Bhd (ACSB) to develop a residential serviced apartment project in Johor Bahru.

The Johor-based construction company said its wholly-owned subsidiary Kii Amber Sdn Bhd has entered into a binding term sheet with AHL’s units, including ACSB, Astaka Padu Sdn Bhd (APSB) and Seaview Holdings Sdn Bhd — a company linked to AHL’s controlling shareholder Datuk Daing A Malek Daing A Rahaman — to form the JVco, according to its filing on Friday.

Kimlun forms JVco with Singapore’s Astaka to build serviced apartments in JB (msn.com)

The Arden residential apartment has a gross development value (GDV) of RM600 million, comprising 600 premium serviced residence units in a skyscraper building 

ACSB and Kii Amber will form the JVco on a ratio of 51:49 respectively, to undertake the project.

In a joint statement on Friday, the companies said that the project is related to phase three of Arden @ One Bukit Senyum, which is slated to launch in the fourth quarter of 2024, with construction expected to be completed within 48 months.

Under the agreement, ACSB will subscribe to 509,900 shares in the JVco at an issue price of RM1 per share, while Kii Amber will subscribe to 490,000 shares.

The JVco has also proposed to acquire a parcel of land measuring 1.662 acres in Johor Bahru for RM61.5 million or RM77 per sq ft to be developed for the residential serviced apartment project.

For the purchase of the land, the JVco entered into a sale and purchase agreement with APSB (registered proprietor of the land) and Seaview (beneficial owner of the land).

Kimlun, whose share price has risen 85% year to date, said the JVco shares subscription will be satisfied wholly in cash from internally generated funds, while the land acquisition will be funded by external borrowings from third parties, including banks, loans or capital injections from each shareholder of the JVco.

Shares of Kimlun finished 10 sen or 7.46% higher at RM1.44 on Friday, giving the group a market capitalisation of RM508.87 million