PETALING JAYA: CME Group Bhd has entered into a joint-venture (JV) agreement with Ruark Properties Pty Ltd to firm up its partnership to develop two parcels of land in Australia.
In an announcement yesterday, CME said the JV agreement would regulate the relationship and understanding regarding the joint mixed project development.
The project involves the development of two parcels of contiguous freehold land measuring 15,784 sq m in Mandurah, Western Australia.
“At this juncture, the parties have been assessing the development plan for the project and are in the midst of finalising the development plan,” said Public Investment Bank Bhd on behalf of the CME board.
Based on the preliminary planning stage, the estimated gross development value and gross development cost are approximately A$112mil (RM336mil) and A$90.45mil (RM271.35mil), respectively.
The parties involved in the JV are CME, its wholly owned subsidiary CME Properties (Australia) Pty Ltd, Ruark Properties and Central Park Pty Ltd.
The Gilbert FT Pty Ltd’s ATF Gilbert Family Trust is the only shareholder of Ruark Properties and the trust’s director Adam Christopher Gilbert is the only shareholder and director of Central Park.
CME, via CME Properties, is in the process of buying the two parcels of land, located on Lot 11 Henson Street and Lot 40 Mandurah Terrace.
“With the proposed acquisitions, the group intends to diversify into the property development and property investment sectors,” it said, adding that with no prior experience it intended to identify an experienced JV partner to mitigate risks.
Under the salient terms of the JV agreement, the accord shall be unconditional and the parties shall be taken as having formed a JV if CME Properties notifies Ruark Properties that it is satisfied that its participation is feasible by Aug 29 or at a later date agreed upon in writing.
The JV agreement will come to an end, with each party bearing its own costs incurred to date, should CME Properties notify Ruark Properties that it is not satisfied or makes no election by the cut-off date.
The JV agreement is also subject to CME obtaining approval from its shareholders to purchase the land and to participate in the JV.
Ruark Properties’ participation is conditional upon it engaging in a final costing and notifying CME Properties of its final figures, as well as providing the concept plans 14 days prior to the cut-off date.
CME Properties will contribute 70% or A$700,000 (RM2.1mil) to the initial start-up cost of A$1mil (RM3mil) required to commence the JV, while Ruark Properties will contribute 30% or A$300,000 (RM900,000).