,SimeProp group managing director Datuk Azmir Merican (pic) said the joint venture (JV) will help grow the property developer’s recurring revenue. “With this JV, our target is that in five years, 30% of our income will be recurring."
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PETALING JAYA: Sime Darby Property Bhd (SimeProp) is tying up with real estate logistics services provider LOGOS Property Group Ltd to set up industrial development funds for clients in the logistics sector.
SimeProp group managing director Datuk Azmir Merican said the joint venture (JV) will help grow the property developer’s recurring revenue.
“With this JV, our target is that in five years, 30% of our income will be recurring.
“Also, we want to move away from just being a property developer and become a real estate development company,” he said during a virtual press conference yesterday.
In a filing with Bursa Malaysia, SimeProp said its wholly owned subsidiary, Sime Darby Property (Capital Holdings) Pte Ltd, had entered into a shareholders’ agreement with LOGOS SE Asia Pte Ltd, a wholly owned subsidiary of LOGOS Property, to govern the parties’ relationship as shareholders to a new joint-venture company (JV Co) named Industrial Joint Venture (Holdings) Pte Ltd.
The deal will see SimeProp and LOGOS Property holding a stake in the JV Co on a 51:49 basis.
The first seed fund is targeting total capital commitments equivalent to US$200mil (RM850mil) from accredited and institutional investors.
To kick off the JV, SimeProp has allocated a 177-acre site within its Bandar Bukit Raja township in Klang, Selangor.
The 177 acres will be rolled out over three phases to manage the incoming supply into the market.
The first phase is expected to commence either by year-end or early next year.
Azmir said Bandar Bukit Raja was selected to leverage its strength as an established industrial township, given its strategic connectivity to all the essential infrastructure in the Klang Valley, such as major expressways, ports and airports.
“We will derive income from leasing, property management as well as the day-to-day operations on maintenance of the assets.”
Azmir added that LOGOS Property’s experience in providing sustainable, integrated logistics solutions will be replicated at the facilities.
“We have strategic land banks and we were looking for the right partner to monetise those land banks.
“A significant amount of land is in Bandar Bukit Raja itself, so there will be plenty of opportunity for us (to monetise it).”
LOGOS Property Malaysia head David Aboud said he was optimistic about prospects of the Malaysian logistics sector.
“Malaysia is a very vibrant economy. Once we come out of the pandemic, I’m expecting things to really pick up in this country.