JK Land( Private) Limited ( JK Land) a fully owned subsidiary of JKH, has acquired a further 26.7% equity stake in Vauxhall Land Development ( Private) Limited (VLDL), and existing subsidiary of JK Land, which owns a 9.38- acre plot of prime land on Vauxhall, street, Colombo, from Finlays Colombo Limited (FCL) for a consideration of Rs.5.98 billion on 25 September 2020.
In a Stock Exchange filing, Gihan Cooray, Deputy Chairman of JKH PLC stated that this purchase is consequent to FCL exercising its option to divest its holding as provided under the joint development agreement entered in 2018.
Prior to the acquisition of the stake, JK Land owned 60% of the shares in VLDL. JKH, through JK Land, has committed to acquire the balance 13.3% equity stake from FCL for Rs.2.99 billion on or before 24 September 2021, post which VLDL would become a fully owned subsidiary of JKH.
The contiguous 9.38- acre property is one of the largest privately held land banks in Central Colombo and is within a proposed zoning are identified under the Beira Lake development plan of the Urban Development Authority (UDA).
The strategic location in the heart of Colombo City has approximately 450 meters of street frontage, a majority of which faces the planned waterfront recreation zone in the Beira Lake Intervention Area Development Plan- which allows for a large-scale development with views over the Beira Lake. This site is classified as a residential and mixed-use development hub.
“This property is a part of the Group’s land banking strategy, where strategic land parcels were identified in order to capitalize the opportunities arising in the real estate and property development industry,” Cooray stated and added that with the acquisition of VLDL, the existing land bank is adequate to sustain a steady pipeline of projects in the long term.
“Despite the prevailing challenging market conditions as a result of the COVID-19 pandemic, pre-sales at the Tri-Zen residential development project in Union Place, Colombo, continue to remain encouraging.”
“A development project at the land owned by VLDL has been earmarked, subject to market conditions, once the Tri-Zen project reaches a certain level completion. This will ensure a study cycle of revenue recognition through the planned monetization of the Group’s land bank,” he said.
(LIN)