PETALING JAYA: The loss-making Jerejak Rainforest Resort & Spa (JRRS), owned by Tropical Island Resort Sdn Bhd (TIRSB) whose shareholders are UDA Holdings Bhd and the Penang government, will be redeveloped in a joint venture (JV) with Penang-based Ideal Property Group.
UDA Holdings Bhd said in a statement that TIRSB, which will ultimately be 100% controlled by UDA following a novation agreement, had inked a JV agreement with Ideal’s subsidiary Q Islands Development Sdn Bhd to redevelop the resort and the 80-acre land owned by TIRSB.
JRRS, operated by Bestari Hospitality Management since 2004, had been quite popular among local tourists.
“TIRSB believe Q Islands Development will be able to re-brand the operations, enhance the value and turn this loss-making property back into profitability,” UDA Holdings said.
The redevelopment masterplan has been approved by the Penang state government which will consist of a bridge linking Pulau Jerejak to the main island, 1,200 units of residential development, a marina, four and five-star hotels, a theme park, 11.5km round-island cycling track and related infrastructure to promote tourism in the state.
According to UDA, construction of the redevelopment is expected to start in the fourth quarter of 2017 and is expected to be completed within eight to 10 years. The cost of the project is not mentioned.
Under the agreement between TIRSB and Q Islands Development, the operation of Jerejak Rainforest Resort will be handed over to the latter within six months after the formalisation of the terms and conditions of the agreement.
TIRSB had recorded an accumulated heavy losses since it began the operation of JRRS in 2004, and this led to the closure of JRRS since May this year.
Last year, it was reported that the Penang government was in talks to sell its 49% stake in TIRSB, held by Penang Development Corp, to UDA Holdings as the business was not profitable.
UDA said in the statement it would ultimately have control 100% of TIRSB upon completion of the novation agreement to ensure the successful transformation of Jerejak Rainforest Resort into an attractive tourist destination, which at the same time would involve other real estate activity. It did not say when the novation agreement would be signed.