Hong Lai Huat Group Ltd has signed an agreement to develop its fourth mixed-use project in Cambodia. The joint venture is between its wholly-owned subsidiary HLH Development Pte Ltd (HLHD) and local landowner, Smart Winner Co Ltd.
They will develop a 11.5 hectare site in Preah Sihanouk province, valued at $25.2 million, turning approximately 3 to 5 hectares into a wholesale and distribution centre with a seafood market. The remaining land will be divided into smaller plots for a mixed-use development project.
Construction of phase one is expected to start in the second quarter of next year after it receives regulatory approval. Once the wholesale and distribution centre has been developed the group will either lease or sell it to a potential operator.
HLHD will pay $10 million for a 49.6 percent stake in the project and contribute $5 million towards the working capital. The landowner will hold the remaining 50.4 percent.
HLHD also has the right of first refusal to buy an additional 19.54 percent of the joint venture for $6.5 million within the next 12 months. That would allow it to benefit from any rise in the land’s value once phase one has been marketed.
“Despite the continuous challenges brought by the Covid-19 pandemic, our prospects in Cambodia remain bright,” said Hong Lai Huat Group Executive Director Ong Jia Jing. “We are pleased to unveil our latest joint-venture investment, which is expected to drive further upside for the group in the near future. Not only do we gain a recurring source of rental income from the development, we are also likely to benefit from the development of mixed-use project or potential sale of the remaining strata title plots,” he said.
The site is close to Cambodia’s only deep-water seaport, Sihanoukville Autonomous Port.
Hong Lai Huat Group is listed on the main board of the Singapore Stock Exchange (SGX). The real estate and property developer has completed numerous projects in Singapore from public and private residential developments to commercial and industrial buildings.
It diversified into the Cambodia agriculture sector in 2008, developing 10,000 hectares of land into a cassava farm. It also build a starch production factory on the site.
In 2015 the group launched D’Seaview in Sihanoukville, comprising 737 residential units and 67 commercial units. Four years later it launched the Royal Platinum mixed use project in Phnom Penh. The group acquired a plot of land last year for a third mixed-use project.
Smart Winner was set up in Cambodia in 2018 by three main directors and shareholders. Chairman Chen Jia Xin, along with Tang Lyhour and Thiem Meng Tan
Source: Khmer Times