PGB Desa Heights Sdn. Bhd., a wholly owned subsidiary of Paragon Globe Berhad (PGB), has signed a Development Rights Agreement with Tropicana Danga Bay Sdn. Bhd., marking a significant expansion into the serviced apartment sector. This partnership will see PGB Desa Heights developing two prime freehold land parcels within the Danga Bay integrated waterfront area in Johor Bahru, an area known for its strategic location and connectivity.
The agreement grants PGB Desa Heights the right to develop these parcels, with a payment of RM102.46 million to Tropicana Danga Bay, representing 10% of the projected Net Development Value (NDV) of the project.
The development will consist of four towers, each 36 floors high, offering a total of 2,552 serviced apartment units. Construction is expected to begin in February 2025 and be completed within four years. The Gross Development Value (GDV) is estimated at RM1.49 billion, with a projected gross development cost of RM1.15 billion, leaving PGB Desa Heights with an expected profit of approximately RM334.45 million.
This project marks PGB's first foray into the serviced apartment market, signaling a strategic shift from its focus on commercial and industrial properties. Executive chairman of PGB, Dato' Sri Edwin Tan Pei Seng, expressed optimism about the project, emphasizing the anticipated demand for quality, sustainable housing in the region as the Johor Bahru-Singapore RTS Link is set to begin operations by 2027.
Located along Persiaran Abu Bakar Sultan in the Flagship A: Johor Bahru City corridor of Iskandar Malaysia, the 7.13-acre development site boasts excellent connectivity, being just 7 kilometers from Johor Bahru's Central Business District and accessible via the Iskandar Coastal Highway.Edwin Tan highlighted the potential growth in Johor Bahru's housing market, noting that this project aligns with PGB's vision to meet the region's evolving housing needs. Karen Lee, director of Tropicana Danga Bay, welcomed the partnership and expressed confidence in the project's contribution to Johor Bahru's economic development.
The collaboration is expected to provide significant economic benefits, further boosting Johor Bahru's transformation into a bustling metropolitan hub. The project is also set to achieve GreenRE Gold certification, reflecting PGB's commitment to sustainable development.
