- Enters into conditional joint venture agreement (“JVA”) with Magna Ecocity Sdn Bhd (“Magna Ecocity”) for 20-acre land in Shah Alam
- Estimated RM1.5 billion gross development value (“GDV”) project is set to be OCR’s largest undertaking into commercial real estate (“CRE”) segment to date
Selangor, Malaysia, 20 April 2022 – Integrated property developer OCR Group Berhad (OCR, the Group, Bloomberg: ONC:MK) is developing its first integrated e-commerce logistics hub via a proposed joint venture with Magna Prima Berhad’s 70% subsidiary Magna Ecocity Sdn Bhd (“Magna Ecocity”).
OCR’s wholly-owned subsidiary OCR Avenue Sdn Bhd (“OCR Avenue”) today signed a conditional JVA with Magna Ecocity to develop the integrated logistics hub on a 20-acre site in Section 15 in Shah Alam, Selangor. Under the JVA, OCR Avenue, as the project developer, will be responsible for the construction and completion of the proposed project on the leasehold land, belonging to Magna Ecocity.
With a planned GDV of RM1.5 billion, the proposed integrated e-commerce logistics hub is set to be OCR’s biggest venture into the CRE segment to date. The proposed development will comprise a mixture of retail and commercial spaces, including multi-storey integrated
e-commerce spaces specifically targeted for small and medium-sized enterprises (SMEs) as well as serviced apartments.
The strategic location of the proposed integrated e-commerce space is expected to appeal to SMEs, being located within the vicinity of commercial and light industrial areas in Shah Alam and with easy access to major highways and ports as well as important amenities and facilities.
The development is currently in planning stage and is expected to be launched in phases from 2023 onwards.
Billy Ong Kah Hoe(“王家豪”),
Managing Director of OCR Group Berhad
"Our maiden integrated e-commerce development is a significant milestone for OCR, and positions us to benefit from the secular strong growth of the e-commerce industry and CRE segment in the market.
The proposed development is expected to play a role in supporting the growth of the SME industry, which in turn will directly benefit Malaysia’s economy. Considering the fact that the SME industry contributes almost 40% to the country’s overall gross development product, 48% to total employment and 18% to total exports, we believe that promoting the advancement of this industry will have a significant positive impact on Malaysia’s growth.
For OCR, this development is in line with our sector diversification strategy, which currently mainly features residential properties. With the target launch of our RM750.0 million affordable housing project in Shah Alam by 2nd half of 2022, the proposed integrated e-commerce spaces will further cement our foothold in the thriving city. "
The proposed JVA will involve a profit-sharing scheme that requires OCR Avenue to pay a total sum of RM160.0 million as minimum entitlement or 30% of the development profit (whichever is higher) to Magna Ecocity, upon fulfilment of certain conditions.
OCR will finance the proposed development through a mixture of internally generated funds and/or external borrowings.