Monday February 25, 2013
Iskandar Waterfront looks to raise up to RM3b, considers listing on M'sia and S'pore exchanges
By B K SIDHU
PETALING JAYA: Iskandar Waterfront Holdings Sdn Bhd (IWH) is looking to raise between US$800mil (RM2.48bil) and US$1bil (RM3.11bil) for its initial public offering (IPO) targeted for June or July this year, sources said.
They said that it may also consider a dual listing on the Malaysia and Singapore stock exchanges.
IWH is looking to raise funds to undertake more reclamation works for the Johor Baru coastline and the rivers within the about 1,700ha that it has in the southern tip of Johor, besides building roads, sewerage and other infrastructure.
IWH is the master developer in Iskandar Malaysia, a metropolis in the making in the south. IWH is developing its land into a waterfront city fronting Singapore in a development that is likely to take between 30 and 50 years to be fully completed.
The development had a higher plot ratio than most other developments in Iskandar Malaysia, a source said.
He said IWH was looking at a plot ratio of four to 10 times for its land.
A higher plot ratio means the area would have high-density residential and more commercial developments as opposed to a low plot ratio, where mostly terrace houses and bungalow units would be built. Floor-area ratios are used as a measure of the intensity of the site being developed, and the ratio is generated by dividing the building area by the parcel area.
“It's urban planning and naturally the plot ratio has to be higher compared with building terraced housing. More so, some of the land is reclaimed and it is too costly to build low-density units on these plots,'' the source said.
Of the about 1,700ha, IWH has about 809.37ha in Danga Bay, which will be developed into 10 flagship projects, including a marina. Each development will be different for better unit take-up rates.
Of the balance land-bank, 768.9ha are in the Johor Baru city centre and the eastern side or Tebrau Coast of the southern tip of Johor Baru, and it also has 121.41ha in Desaru. The about 1,700ha made up about 1.12 billion sq ft of gross built-up area, the source said.
Some analysts say IWH is being seen as a single-project company, but a source feels although that might be the case, the project would take between three and five decades to complete.
“Waterfront cities take decades to complete, and this would take a long time for completion even though the build up has begun.
“But, what is interesting is the strategy IWH has taken to jointly develop all its land with local and foreign developments, as that ensures recurring income,” he said.
For now, about 15%, or 242.81ha of its land, have been sold or have been committed for development, with a lot more selling to do. However, the source added, talks with several parties, both local and foreign developers, were at various stages.
“There is much more interest in IWH's development now compared with when it started two years ago,'' he said.
The current ratio of the land sold to local/foreign developers is 60:40.
Last week, IWH managed to sell a sizeable plot of a man-made island measuring 28.75ha to Singapore's Temasek Holdings Pte Ltd and CapitaLand Ltd for RM800mil. An IWH unit will also be involved in the development of a mixed integrated project that will have a gross development value of RM8bil.
“There is no real need to look for new land at this point until IWH can sell more plots. As for now, its priority is to get more developers to jointly develop its land-bank,” the source said.
IWH is 60%-owned by businessman Tan Sri Lim Kang Hoo via Credence Resources Sdn Bhd, while the Johor government, via Kumpulan Prasarana Rakyat Johor, has the balance 40% . The Employees Provident Fund and Khazanah Nasional Bhd have indirect stakes in IWH via Iskandar Investment Bhd.