PETALING JAYA: Ageson Bhd’s 75%-owned subsidiary, Ageson Holdings Sdn Bhd, has entered into a development rights agreement with Menteri Besar Inc (Perak) (MBI Perak) to develop a 475-acre land parcel in Batang Padang, Perak, with an estimated gross development value (GDV) of RM1.24 billion.

The group said in its Bursa filing that the proposed development entails a mixed project comprising government agency offices, shop offices, houses and industrial lots.

Under the terms of the agreement, Ageson will pay MBI Perak an entitlement of equivalent to 20% of the total GDV, or RM72 million, whichever is higher.

Ageson executive director Datuk Seri Chin Kok Foong remarked that the agreement provides the group with development rights to the land without burdening existing cash flow.

“It will not only provide us earnings visibility for the next few years but also expand our income base through the development of built-to-suit industrial space. We are capitalising on the strong demand for industrial properties,” he said in a press release.

As the master developer of the proposed development, the group is assessing various options to develop the land, including the cooperation of joint-venture partners or even developing the land on its own.

The project is estimated to have a gross development cost of RM879.9 million and it is expected to commence in the first quarter of next year.

Another Ageson executive director, Datuk Seri Liew Kok Leong, highlighted that it will utilise building information modelling with the project which will have better cost savings and maximise resource efficiency.

He said the group is excited to be part of the joint venture with MBI Perak and it will continue to drive synergies from other divisions for growth.

“The joint venture is in line with the group’s strategic direction to focus on property development activities to sustain our future growth.”