LUXURY property developer Tuan Sing on Wednesday announced a 90:10 joint venture with private Singapore developer, Habitat Properties, to develop a site in Marina City Batam, Indonesia, into an integrated mixed development township.
This will comprise hotels with MICE (meetings, incentives, conferencing, exhibitions) facilities, retail, tourist facilities and attractions, and residential properties.
The stake will cost Tuan Sing S$39.15 million. The consideration is based on 90 per cent of the net book value of the special purpose vehicles, adjusted by the valuation of the site at S$43.5 million. The two valuers were KJPP Sarwono, Indrastuti & Rekan and KJPP Hendra Gunawan dan Rekan.
The company will pay for the cash portion of the deal with internal cash resources, and the rest in the form of three residential units at Cluny Park Residence in Singapore, valued at about S$16 million.
The site is about 85 hectares, comprising four plots of land, located in Marina City, and an estimated 45-minute ferry ride from Singapore HarbourFront Centre. One of the plots overlooks the Singapore Marina skyline.
The initial phase of the development is planned to comprise of a 400-room resort hotel, a 30,000 square metre retail and entertainment zone, and close to 2,000 residential apartments with recreational facilities.
In future phases, Tuan Sing plans to invest in educational facilities, medical tourism and new entertainment concepts to attract visitors and investors in the region.
The project is expected to launch around end 2017 or early 2018.
This is an interested person transaction, as non-independent director Michelle Liem Mei Fung has a 99.9 per cent interest in the vendor. Tuan Sing is controlled by the Liem family.
Tuan Sing said that the deal is in line with the company's strategy to grow its businesses across geographies and property segments, to have portfolio diversification and to enhance earnings stability in the future.
"It is envisaged that the Batam Marina City Project presents attractive and opportune prospects for growth, given the potential further development of Batam as a tourism hub," it said.
Batam is an island and the largest city in Riau Islands Province in Indonesia. It is a free trade zone, part of the Indonesia-Malaysia-Singapore Growth Triangle, located 20 km from Singapore's south coast.