KUALA LUMPUR (Sept 25): Ivory Properties Bhd announced that its wholly-owned subsidiary, Ivory Residence Sdn Bhd (IRSB) has entered into a joint venture agreement (JVA) with JB Lee Properties Sdn Bhd (JBLee) to jointly develop a mixed development project on a piece owned by the latter with an estimated gross development value of RM2 billion in Teluk Jawa, Johor Bahru.

The property developer told Bursa Malaysia today that the proposed development sits on some 7.1-acre freehold agriculture land in Plentong, Johor Bahru, owned by JBLee. Its actual size is yet to be properly ascertained, but JBLee has warranted it to be about 8.9 acres or more.

It said the land will be converted and re-zoned for use as a mixed development of residential and commercial properties.

"IRSB, as developer, will be responsible for the development of the proposed development covering construction and building works in accordance with the agreed plans or such modifications or amendments as may be required by authorities and development will include the whole or one phase or a few phases as determined by the developer," the filing said.

It added that JBLee is a properties investment firm incorporated in June 19, 2013.

On the project’s funding, the filing said the proposed development would be funded through internally-generated funds or bank borrowings.

The filing, however said the JVA is conditional, among others, upon the confirmation that the size of the property is not less than 8.9 acres and that JBLee obtain approval for the conversion and rezoning of the property for commercial use within 24 months from the date of receipt of the title.

Under the JVA, the landowner is entitled to 25% of the proceeds of sale of the units - commercial or residential - in the development, with RM500,000 paid upon execution of the JVA and the balance “to be paid progressively within 30 days from the end of each quarter of a year”, the filing added.

The JVA may be terminated if the developer and landowner could not agree on an extension period to obtain conversion approval and overall planning approvals, if pre-sales target is not met within the cut-off date or extended cut-off date, or if the developer opts not to vary the percentage of pre-sales target.

Ivory said the proposed development is in line with the group's strategic planning of expanding its reach outside Penang and securing partnerships with strategically-placed land bank for development.

It added that the JV is not expected to have any material impact on the group’s earnings, net assets and gearing of for the financial year ending Dec 31, 2014, though the group’s gearing might be impacted by any successful arrangement of financing for the Proposed JV.

As at midday break, shares of Ivory remained unchanged at 59.5 sen with 100,000 units traded.