Perennial Real Estate to invest in mixed-use Colombo development via JV

PERENNIAL Real Estate Holdings has led and syndicated a consortium of investors and through its wholly-owned subsidiary Perennial EM Holdings (PEMH), entered into a joint venture (JV) to invest in a mixed-use development in Colombo, Sri Lanka.

The mixed-use development will comprise residential, office and retail components, and is expected to have a total gross floor area of about 120,000 square metres. The total expected contribution by Perennial for the JV is US$17.5 million and is expected to be funded by a combination of internal cash, sales of residential and office units, as well as bank borrowings (if available).

Other members of the JV are HPRY Holdings, Hong Lee Holdings (HLH), Longhlin Asia (LAL) and an unrelated party. PEMH will hold 31.25 per cent in the JV company, Perennial CBL (PCBL).

PCBL and Pyramid Wilmar Plantations will, in turn, hold stakes of 80 per cent and 20 per cent respectively in Perennial Real Estate Lanka, which will acquire the land and develop the project.

The JV with HPRY, HLH and LAL in relation to PCBL, and the JV between PCBL and Pyramid in relation to the Perennial Real Estate Lanka, are considered interested-person transactions. This is because HPRY is wholly owned by Kuok Khoon Hong, a director and controlling shareholder of Perennial. HLH and LAL are associates of Mr Kuok. Meanwhile, Pyramid is an indirect 87.5 per cent subsidiary of Wilmar International, which is a controlling shareholder of Perennial.

Pua Seck Guan, a director and substantial shareholder of Perennial, is also a director of Wilmar International and PEMH.

Perennial's Audit and Risk Committee reviewed the various investments and proposed terms of the JV and is satisfied that they are on normal commercial terms, the announcement said.