The deal, which was first struck in June 2008, was for Damac Properties (Malaysia) Sdn Bhd to develop three parcels of commercial land that forms part of Puteri Harbour at Nusajaya in Johor.
Under a sale and purchase agreement (SPA) signed in June 2008, both sides were to have agreed to the conditions of the agreement by June 2009.
"The termination will have no impact on our financial results as the expected revenue from this proposed transaction has not been recognised in our accounts," UEM Land managing director and chief executive officer Wan Abdullah Wan Ibrahim said in a state-ment yesterday.
UEM Land and Damac had been in discussions on certain issues relating to the conditions of the deal. However, they were not able to come to an agreement on these issues and have now agreed for the SPA to be terminated.
Damac on June 16 told UEM Land it did not agree to further extensions of the extended approval period, causing the SPA to lapse.
"Given the current global economic conditions and the impact on many companies and countries including those in the Middle East, we felt that there is no point in pursuing the matter and that a termination of the SPA was in UEM Land's best interest," Wan Abdullah said.
"Our aim is to accelerate the momentum of development and investment in Puteri Harbour. The foundation has already been laid and we have received strong interests from potential investors to partner us in developing the area. We are confident of concluding some of these deals in the near future," he added.
News reports as recent as April had already raised questions regarding the deal, given Damac's troubles following the property bubble bursting in Dubai beginning end of last year.
In December 2008, Damac cut 200 jobs or 2.5 per cent of its workforce.
The company has also called off its Palm Springs project, a 25-storey residential and resort development, planned for the Jebel Ali Palm in Dubai.
UEM Land has another Dubai-based partner in Limitless LLC as a major investor in Nusajaya. Its joint venture is through Haute Properties Sdn Bhd, which will develop a 44.4ha residential project in Puteri Harbour with an initial investment of RM241.8 million.
It is understood that a layout for this project has already been submitted, and will continue as planned, with completion scheduled for 2013 with an estimated gross development value of more than RM1.5 billion.
By Business Times
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