Suspended stock Astaka inks MOU to jointly undertake land development projects with RM1b development value

PROPERTY developer Astaka Holdings has entered into a non-binding memorandum of understanding (MOU) through its subsidiary Astaka Padu with Malaysian company DMR Holdings for a potential collaboration to jointly undertake land development projects in Johor, Malaysia.

These projects will cover 42 acres of land across various key cities in Johor, including Iskandar Puteri, Tampoi and Pengerang, and have a total gross development value of RM1 billion (S$320.8 million), the company said on Monday (Jan 24).

The development projects are expected to be completed over the span of 5 years and consist of mixed commercial developments and a light industrial park development.

Astaka said this light industrial park project marks its foray into industrial development. These new projects also highlight the group's intentions and commitment to become a "prominent integrated property developer" by expanding further on the portfolio of property developments and diversifying into industrial developments, added the company.

The development sites are also within close vicinity to prominent establishments, with the proposed site in Iskandar Puteri located near Legoland Malaysia and Kota Iskandar Development- the administrative centre of the Johor Government.

Khong Chung Lun, chief executive of Astaka, said: "While the pandemic has disrupted the global economies, we have continued to identify suitable opportunities to grow the group in a well calibrated manner.

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"These joint development projects, if undertaken, will allow both parties to synergise resources, network and expertise to help the group establish itself as a prominent integrated property developer in Johor."

While the Covid-19 pandemic has resulted in behavioural shifts in terms of space demands, Astaka said the demand for office spaces in Asia-Pacific is expected to increase in 2022.

The group noted that the gradual reopening in Malaysia has also highlighted the need for businesses to incorporate an "omnichannel strategy" especially as retailers are looking to strengthen their physical presence. This, the group said, is expected to drive up demand for retail spaces.

Astaka's shares have been suspended from trading on the Singapore bourse since September 2019. The group was also battling legal proceedings from 1 of its contractors and China State Construction Engineering (CSCE). (see amendment note)

In August last year, the Singapore Exchange (SGX) ordered the group's then-executive director and former chief executive Zamani Bin Kasim to resign from all his positions for causing the company to breach Catalist rules. SGX has also reprimanded the group for its failure to disclose 3 letters of demand relating to loan defaults.

Amendment note: This article has been edited to reflect that Astaka Holdings has reached settlement agreements with its lawsuits.