KUALA LUMPUR: UDA Holdings Bhd will receive RM1bil as development rights for the redevelopment of the former Pudu jail site into the multi-billion ringgit Bukit Bintang City Centre (BBCC).

UDA, Eco World Development Group Bhd (Eco World) and the Employees Provident Fund (EPF) have formalised a tripartite agreement to jointly develop the BBCC project with a gross development value of RM8bil.

The companies formed a special purpose vehicle (SPV) – BBCC Development Sdn Bhd – which will undertake the project.

“The SPV will pay UDA development rights of RM1bil. The GDV is RM8bil and the gross development cost of the BBCC is estimated at RM6bil,” chairman Datuk Johari Abdul Ghani said after the signing ceremony here yesterday.

“UDA will remain the land owner and assign the development rights to the SPV. It is the hope of UDA that the BBCC initiative will be similar to the high profile Battersea Power Station development project in London that would carry a bold brand presence coupled with proven financial capacity,” Johari said.

UDA and Eco World will have a 40% stake each in BBCC while the EPF will have a 20% share. The board members of BBCC will include four representatives each from UDA and Eco World and two from the EPF.

The BBCC project, a redevelopment of the 19.4-acre former Pudu jail site, will comprise a mixed residential and commercial development with a proposed world-class master plan, consisting strata offices, office towers, a hotel and serviced residences. There will also be a lifestyle mall which will include a Malaysian grand bazaar, a retail mall, food and beverages as well as entertainment components.

Johari said the SPV would apply for a development order for the project and it could take up to six months. The project is expected to be completed in eight years.

Despite being a former prison site, Johari said that the project had attracted some interest from Mitsui Fudosan Co Ltd of Japan and Zepp Live Entertainment Inc, an unit of Sony Music Entertainment Japan.

“We will be signing a memorandum of understanding with Mitsui next week for the development of the lifestyle mall,” he said, adding that the SPV would not be selling the mall for recurring income.

He added that it was also discussing with other investors on the project including en bloc investments. Johari said he was not worried about financing the mega project as “banks are lining up to see how they can participate.”

Asked about the increase in the supply of offices, Johari said he was confident that the location of the property, which fronts Jalan Pudu and Jalan Hang Tuah, would be able to attract investors. “We sell Bukit Bintang. We are not in isolation,” he said.

Furthermore, he stressed that the SPV would impose a 50% bumiputra participation for project. He said under government rules, any new retail development must have at least a 50% bumiputra participation. “We are looking for bumiputra investors with a good track record, in terms of handling retail businesses, as well as building and maintaining any past development projects.

“We are aware that most bumiputras do not carry an international or well known brand. So, we’ve decided to build the Malaysian Grand Bazaar, specifically to give them an opportunity to market their products,” Johari said. The bazaar will showcase the best of Malaysian food, handicraft, arts, heritage and culture, together with a wide variety of local designer and homegrown brands.

Johari said UDA would maximise the profit from this project and channel the profit to the redevelopment of Kampung Baru.