Tesco Hypermarket in Seri Tanjung Pinang development

Eastern & Oriental Group (E&O) is to get an impressive 6.89 per cent gross yield from a plot of land and hypermarket will construct in its Seri Tanjung Pinang development in Penang.

Under an agreement, its wholly-owned subsidiary, E&O-PIE Sdn Bhd (Eopie), will lease the 251,878sq ft hypermarket to Tesco Stores (M) Sdn Bhd for RM7.56 million a year for three years.

This equates to a monthly rental of RM2.50psf.

Eopie is acquiring the 6.97-acre site on which the hypermarket will be built from sister company E&O Property (Penang) Sdn Bhd for RM66.70 million, or RM220psf.

When the deal is finalised, Eopie will also have built an 800-bay carpark. Construction of the RM43.18 million building is expected to start in the first quarter of 2008.

Tesco will take a 20-year lease, with rental increasing by 10 per cent for the second term of three years and by five per cent every three years thereafter.

The site is within the E&O group's ambitious Seri Tanjung Pinang development, for which 980 acres are being reclaimed from the sea.

This Tesco outlet will be part of the 240-acre development's first phase that will also comprise terraces, semi-dees, bungalows, condominiums, apartments, as well as commercial and retail units.

Located 5km northwest of George Town city centre, and minutes from the famed Gurney Drive, the RM2 billion Seri Tanjung Pinang is the largest ever seafront development in Penang, and aims to rival those in the Mediterranean, Dubai and Australia. - By NST

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