Business

Tuesday December 4, 2012

China’s Country Garden buying 55 acres in Iskandar for RM900m

By B.K. SIDHU
bksidhu@thestar.com.my


PETALING JAYA: Iskandar Waterfront Holdings Sdn Bhd (IWH), which is transforming the coastline of Johor fronting Singapore into a waterfront haven, has seen its land bank swell to over 4,000 acres via a restructuring and land acquisitions.

Of that, about 315 acres are located in Desaru, which is undergoing a massive boost to become a vibrant tourist and lifestyle destination.

Today, one of China's biggest property developers, Country Garden (Holdings) Ltd, will ink an agreement to buy 55 acres of land at Danga Bay for RM900mil from IWH.

“Country Gardens plans to develop a marina and marina club, hotel, serviced apartments, offices and commercial development that will have a gross development value of RM10bil to RM18bil. This project will take several years,'' said IWH executive vice-chairman Tan Sri Lim Kang Hoo.

“We have a lot of interest from local and foreign parties, but this is the fastest deal we have concluded. We only began talking four months ago. Perhaps their decision-making process is a lot faster than many others,” he said.

He added that IWH was in negotiations with several other parties and expected to enter into many more deals to develop its land bank in the coming months.

Country Gardens wants more than the 55 acres it is buying and Lim said “we are looking for suitable sites to offer to them. We'd rather have them develop different parts of Danga Bay instead of just one area. We have 10 different developments at Danga Bay.''

Danga Bay developments will span over 2,000 acres of the total 4,000 acres. It is being transformed into a premier waterfront destination with features such as cruise ship terminal, marina, fisherman's wharf and tower blocks to house commercial offices, hotels, exhibition and convention centres, and residential properties.

Given the different developments, IWH has to ensure that each developer has product differentiation so that demand will always be there and to prevent a glut.

Country Gardens joins several other developers such as Dijaya Corp Bhd, Brunsfield Group, Australia's Walker Group and Singapore's Azea Residences to develop parts of Danga Bay. Normally, IWH enters into joint ventures for all the developments but Lim said it made an exception to sell the land outright to Country Gardens.

Danga Bay is one of the many developments taking shape in Iskandar Malaysia.

After a restructuring exercise early this year which involved the takeover of Tebrau Teguh Bhd, IWH is now 60% owned by Lim's Credence Resources Sdn Bhd and the remaining 40% is held by Johor state investment agency, Kumpulan Prasarana Rakyat Johor.

Hence, IWH had a boost in land acerage. However, Lim said, “we have also been buying land to add to the average. Contrary to market talk, we have bought all the land that we own from the banks via auctions, from individuals and even Danaharta.''

Danga Bay is located on the west side of Johor Baru and Lim said the other parts making the 4,000 were located in the northern part of Johor Baru town, within the town and on the eastern side. The whole city will be linked by trams and MRT while several new highways have already been built.

“And when we sell land, we use the money to buy more land and reclaim more or we also revive abandon projects in the state. All these may cost money but we are doing this to create enough economic activity in the state,'' he said.

All the land will be developed in stages but IWH need investors to undertake the development. IWH will also modernise Johor Baru's central business district to create a more vibrant capital city of the state.

“The entire transformation of Johor Baru will take several years to decades and it would be done gradually to cater to the needs of market demand,'' he added.

On Desaru, he said the plan was to develop resort and lifestyle living accommodation because there would be demand for such facilities when the Pengerang oil and gas facilities take shape. Khazanah Nasional Bhd is also developing part of Desaru into a tourism and theme park centre.

“We will be able to attract expatriates as Khazanah is marketing the development at Desaru. We, the private sector, will not be able to do all that,'' he said, adding that “again, this land in Desaru is something we bought from Danaharta.”

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