- Says development project on land will begin once Tri-Zen reaches certain level of completion
JK Land Private Limited (JK Land), a fully owned subsidiary of John Keells Holdings PLC (JKH) last week acquired a further 26.7 percent equity stake of Vauxhall Land Development Private Limited (VLDL), an existing subsidiary of JK Land, which owns 9.38-acre plot of prime land on Vauxhall Street Colombo, from Finlays Colombo Limited (FCL) for a consideration of Rs.5.98 billion.
A stock market filing by JKH said the purchase is consequent to FCL exercising its option to divest its holding as provided under the joint development agreement entered into in 2018.
In March 2018, JKH entered a joint venture with Finlays to develop the Vauxhall Street Land.
Prior to the acquisition JK Land owned 60 percent of VLDL shares.
JKH, through JK Land, has committed to acquire the balance 13.3 percent equity stake from FCL for Rs.2.99 billion on or before September 2021, post which, VLDL would become a fully-owned subsidiary of JKH.
JKH Deputy Chairman Gihan Cooray said a development project in the land owned by VLDL has been earmarked, subject to market conditions, once the Tri-Zen project reaches a certain level of completion.
Cooray added that despite the prevailing challenging market conditions as a result of COVID-19, pre-sales at the Tri-Zen residential development project in Union Place continue to remain encouraging.
The contiguous 9.38-acre property is one of the largest privately held land banks in central Colombo and is within a proposed zoning area 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 metres 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. JKH said this property is part of the group’s land banking strategy, where strategic land parcels were identified in order to capitalize on opportunities, arising in the real estate and property development sector. With the VLDL acquisition, JKH is of the view that its existing land bank is adequate to sustain a steady pipeline of projects in the long-term.