PETALING JAYA: OCR Group Bhd will be developing its first integrated eCommerce logistics hub via a proposed joint venture with Magna Ecocity Sdn Bhd.
The integrated property developer said its wholly-owned subsidiary OCR Avenue Sdn Bhd yesterday signed a conditional joint venture agreement (JVA) with the 70% -owned subsidiary of Magna Prima Bhd
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 gross development value of RM1.5bil, the proposed integrated eCommerce logistics hub is set to be OCR’s biggest venture into the commercial real estate (CRE) segment to date.
OCR managing director Billy Ong said the group’s maiden integrated eCommerce development would position the group to benefit from the secular strong growth of the e-commerce industry and CRE segment in the market.
“This development is in line with our sector diversification strategy, which currently mainly features residential properties.
“With the target launch of our RM750mil affordable housing project in Shah Alam by the second half of 2022, the proposed integrated eCommerce spaces will further cement our foothold in the thriving city,” Ong said in a statement.
The proposed hub would comprise a mixture of retail and commercial spaces, including multi-storey integrated eCommerce spaces specifically targeted at small and medium-sized enterprises (SMEs) as well as serviced apartments, OCR said, adding the development is currently in its planning stage and is expected to be launched in phases from 2023 onwards.
The proposed JVA will involve a profit-sharing scheme that requires OCR Avenue to pay a total sum of RM160mil as minimum entitlement or 30% of the development profit (whichever is higher) to Magna Ecocity, upon fulfillment of certain conditions.
“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,” Ong said.
“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 , ”He added.