DRB-Hicom’s wholly owned subsidiary Rebak Island Marina Bhd and Northern Gateway Free Zone Sdn Bhd (NGFZ) have mutually decided to terminate their land status swap agreement inked in December 2011.

PETALING JAYA: DRB-Hicom Bhd’s plan to develop a high-end boutique luxury mixed-development project in Langkawi’s Rebak Island has hit a snag.

The company, which owns and operates the Rebak Island Marina Resort on the island, failed to get the Kedah government’s approval to change the status of 134.76ha there to non-Malay reserve (non-MR).

Hence, DRB-Hicom’s wholly owned subsidiary Rebak Island Marina Bhd and Northern Gateway Free Zone Sdn Bhd (NGFZ) have mutually decided to terminate their land status swap agreement inked in December 2011.

The swapping of the land status is an allowed exercise to convert the status of MR land to non-MR land subject to the relevant conditions imposed by the Kedah state government.

Rebak Island Marina Bhd had sought to change the designation of 134.76ha that it owned in Rebak Island to non-MR by swapping with the non-MR status of 141.64ha of NGFZ-owned freehold land in Bandar Kota Perdana in Kubang Pasu, Kedah, for a total cash settlement of RM76mil.

DRB-Hicom intended to develop a high-end “boutique” luxury mixed development targeted mainly at high-net-worth individuals.

According to its announcement to the exchange on Dec 21, 2011, there was a surge in the exodus of high-net-worth individuals to the Asean region which had contributed to the success of “boutique” luxury concept projects, including in Phuket, Koh Samui and Bali.

“Malaysia is the only country in the region that does not have the ‘boutique’ luxury concept developments,” the company said.

DRB-Hicom had expected the proposed land status swap to be completed by the second quarter of 2012.

“Approval from the Kedah state authority for the proposed land status swap exercise was not obtained despite several mutual extensions to the approval period,” it said in the statement.