A-Smart in JV to build mixed development in Timor-Leste

MAINBOARD-LISTED A-Smart Holdings on Thursday said it has inked a joint-venture (JV) agreement with a group of private investors to develop a 14 to 16-storey mixed development, comprising luxurious residential apartments, retail and office property units, in Timor-Leste.

The project would cost about US$22.8 million, including construction, land, selling and administrative costs; the JV partners will contribute up to US$20 million as shareholder loans to the JV company. Each of the shareholder's loans is unsecured and interest-free. Any capital requirement which exceeds the JV's own resources will be funded by bank borrowings, it said.

A-Smart will take a majority 60-per-cent stake in the JV and accordingly, its capital commitment in the JV will be up to US$12 million, which will be funded mostly from internal cash sources.

The JV is a strategic alliance between the group and Liao Sheng Tung and Ng Choon Meng, who are its existing business partners in Timor-Leste, as well as Vico Construction and Daniel Vincent Iong Remedious, who is a nominee of the land owner.

Vico Construction is a JV between Zuo Haibin and Chinese developer Nanshan Group.

The project site, comprising an area of 3,135 sq m freehold land, is situated along the seafront coastline of Lecidere in Dili. Directly facing the Port of Dili, the site lies close to the headquarters of the World Bank, foreign embassies and the Timor government offices.

Ma Wei Dong, chairman of A-Smart Holdings, said the firm's entry into the emerging market, which is rich in oil and gas, is "timely" as there is a shortage of quality residential and commercial properties there. "Leveraging a first-mover advantage, our timely entry will allow us to broaden our earnings base and generate new avenues of revenue necessary for us to grow sustainably."

The group said it believes that the government's plan to convert the Port of Dili into a cruise centre will allow home buyers and investors to enjoy a growth in valuation of the development.