Business

Wednesday January 9, 2013

Iskandar Waterfront Holdings IPO likely to value developer about RM5bil

By TEE LIN SAY and RISEN JAYASEELAN
starbiz@thestar.com.my


Visitors looking at a model of IWH’s waterfront development along Danga Bay, Johor Baru. Lim’s plan to list IWH has caused excitement among international and local investment bankers. Visitors looking at a model of IWH’s waterfront development along Danga Bay, Johor Baru. Lim’s plan to list IWH has caused excitement among international and local investment bankers.

PETALING JAYA: The planned mega initial public offering (IPO) by tycoon Tan Sri Lim Kang Hoo of Iskandar Waterfront Holdings Sdn Bhd (IWH) is looking to value the master developer at around RM5bil, causing excitement among international and local investment bankers looking to play a role in the offering, sources said.

An earlier reported figure of US$300mil (RM912mil) to be raised from the exercise might be a conservative figure, said one banker. “It is possible that the amount raised could be more than that, judging just on the size and value of recent land deals by IWH,” said one banker.

On the other hand, other bankers cautioned that considering the “one-project” nature of IWH's business, it may not be that easy for investors to attach too high a valuation on the shares of IWH.

IWH is to be listed as a “master developer”. Checks revealed that there are less than 10 such listings globally.

While still in its early stages, the IWH IPO has attracted a few international bankers to visit the management of IWH in response to a request for a proposal.

IWH's proposition is that it is banking on the potential future earnings from the 1,619-ha waterfront city project in the southern state of Johor.

In other words, the IPO was banking on the potential of an influx of buyers, mostly Singaporeans, into the southern state, as well as transforming Johor into the next thriving hub of Shenzhen-Hong Kong, bankers said.

Lim’s plan to list IWH has caused excitement among international and local investment bankers. Lim’s plan to list IWH has caused excitement among international and local investment bankers.

The entire waterfront project will have a gross development value (GDV) of some RM80bil. It is located next to the Iskandar Development Region, which is the country's southern economic corridor. When completed, Iskandar Waterfront will be a waterfront city fronting Singapore.

Lim owns 60% of Iskandar Waterfront via Credence Resources Sdn Bhd. His partner in this venture is the Johor state government via Kumpulan Prasarana Rakyat Johor, which holds the remaining 40% stake in IWH.

Both the Employees Provident Fund and Khazanah Nasional Bhd have indirect stakes in IWH held via Iskandar Investments Bhd.

So far, Iskandar Waterfront has inked a deal to sell some 55ha of land for nearly RM900mil to Hong Kong-listed Country Garden Holdings. This was a landmark deal as it was the first time Iskandar Waterfront was selling land outright to a third party without taking an equity in the project.

In an earlier interview, Lim had told StarBiz that Country Garden's development would have a GDV of some RM18bil, with the first-phase GDV of the project alone at around RM2.5bil. The project will be stretched over 10 years.

The other ongoing projects in Iskandar Waterfront include the RM500mil Azea Residences by a Singapore group, the RM105mil Plazzo Hotel and Serviced Suites by the Waz Lian Group and the RM20mil Tune Hotel project.

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