Yoma Strategic Holdings has, on Dec 15, entered into a joint venture agreement with First Myanmar Investment Public Company Limited and Jebsen & Jessen Property Holdings through its wholly-owned subsidiary Yoma Development Group.
First Myanmar Investment is a public company that conducts financial services, healthcare services, real estate development and services, and investment holding. The company is incorporated in Myanmar and listed on the Yangon Stock Exchange.
Jebsen & Jessen Property Holdings is part of the Jebsen & Jessen Group, an Asean-focused industrial conglomerate engaged in cable technology, ingredients, life sciences, packaging and technology.
The move is deemed an interested person transaction as Serge Pun, who is the executive chairman and controlling shareholder of Yoma Strategic, is also the executive chairman and controlling shareholder of First Myanmar Investment.
Accordingly, First Myanmar Investment is an interested person of Yoma Strategic.
The agreement will see the three parties participate in the co-development of part of the 21.31 acres of land situated in Hlaing Thar Yar Township into residential apartments.
The apartments, also known as the City Loft West Project, will replicate Yoma Strategic’s City Loft @ StarCity concept.
The development will take place in two phases; the first phase will comprise 11.08 acres while the second phase will span across 10.23 acres.
Construction for phase one is expected to begin in 2021 and will consist of seven towers and about 1,800 units. It will have a total gross floor area (GFA) of about 1.4 million square feet, subject to the approvals from relevant authorities.
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Under the agreement, the parties will also form a joint venture company known as CLW Development Limited. Jebsen & Jessen Property Holdings will hold a 50% stake, while Yoma Development Group and First Myanmar Investment Public Company will hold 25% interests respectively.
The initial investment in CLW Development amounts to some US$28 million ($37.3 million). Yoma’s pro rata share will amount to some US$7 million, which is to be funded through internal cash.
The site, on which City Loft West Project will be built, is currently owned by FMI Riverside Development Limited (FMIRDL).
The company is 47.5% owned by First Myanmar Investment and 52.5% owned by Yangon Land Company, an indirect wholly-owned subsidiary of Serge Pun & Associates (Myanmar) Limited (SPA).
As FMIRDL has been granted the land development rights of the Target Site by the relevant authorities, CLW Development would be a co-developer of phase one with FMIRDL.
FMIRDL, as co-developer, would be paid US$20 million by CLW Development.
CLW Development would also be granted a first right to participate in the development of phase two of City Loft West Project.
According to a statement via SGX, Yoma says the City Loft West Project represents an opportunity for the group to further expand its real estate activities to the west side of Yangon, following the success of its previous project City Lloft @ StarCity.
Shares in Yoma Strategic closed 0.5 cent lower or 1.6% down at 30.5 cents on Dec 15.
