For the most part, the relationship between developer Sunway Bhd and the Perak State Government has been amicable, as key projects such as Sunway City Ipoh and the Lost World of Tambun theme park have done much for the state’s coffers.
So news that the state is now demanding the return of undeveloped portions of land within the Sunway City Ipoh township is surprising. The state government is a partner in the township development, under a joint-venture agreement penned in 1997.
In a statement to Bursa Malaysia, the Sunway Group said that its subsidiary Sunway City (Ipoh) Sdn Bhd has received a letter from Perak State Secretary last week informing them that the development agreement has lapsed.
The statement, however, does not make reference to the size and purpose of the undeveloped portion.
However, Sunway said it would “dispute the notice” and refer the matter to arbitration.
Sunway City (Ipoh) reportedly owns a 65 per cent stake in the joint-venture, with the remaining portion shared between Perak state and Yayasan Perak.
Sunway City Ipoh sits on 1,346 acres, with commercial and residential components as well as the RM60 million Lost World of Tambun theme park, which is a major draw for the township and state – one of Sunway’s two premier multi-park attractions (the other being Sunway Lagoon).
Sunway also recently announced that it would launch new projects, approximately worth RM500 million, at Sunway City Ipoh in Tambun over the next three years. This will include a new mall, serviced apartmets and a hotel within the Lost World of Tambun enclave.
“The effect of the said notice is not expected to have any material effect on the earnings per share and nett assets per share of Sunway for the financial year ending Dec 31, 2016 and beyond,” it said.