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Fajarbaru Builder Group Bhd has announced its entry into a significant joint development project with Penang Development Corporation (PDC) in Bandar Cassia, Batu Kawan. The development will include a medical city, Medi-City, and a mixed-use hub. Fajarbaru has agreed to pay RM111.45 million to PDC for the purchase of 51.17 acres of land for the first phase of the Medi-City project.

The land purchase is part of a larger acquisition that covers a total of 235.8 acres. Fajarbaru will buy the first parcel in 2025 and has been granted the right to purchase an additional 184.63 acres (Parcel 2) within 12 months of finalizing the master purchase and development agreement (PDA). The terms and conditions of the PDA are still being negotiated, and further announcements are expected after the agreement is signed.

The development offers Fajarbaru an opportunity to expand its presence in Penang, especially within the healthcare and mixed-use development sectors. Of the 51.17 acres in Parcel 1, 15.3 acres will be designated for healthcare components, including a 200-bed hospital and various medical facilities. The remaining 35.8 acres will be allocated for residential and commercial developments, supporting the vision of creating a vibrant mixed-use hub in Batu Kawan.

Fajarbaru and PDC have outlined several conditions that must be met before the master PDA can be finalized. These include securing pre-establishment approval for hospital zoning from the Ministry of Health and identifying an operator for the hospital within 12 months. PDC will also be responsible for obtaining freehold status approval from the state authority, while Fajarbaru needs to secure shareholder approval within six months.

In addition to the medical city, the 235.8-acre master plan will feature a wellness village, a medical education hub, a health-tech park, a waterfront commercial centre, and seaview residences. Fajarbaru also announced a profit-sharing agreement with PDC, with a minimum rate of 15% for the mixed-use development on Parcel 1, payable over eight years.

Fajarbaru plans to fund the project through a mix of internal funds, bank loans, and equity funding. The company, which ended June 2024 with a net cash position of RM83.65 million, saw its shares rise slightly by 1.2% to close at 43 sen, giving it a market capitalisation of RM320.22 million.