China-based Greenland enters into RM2.4b land transaction with Malaysia's IWCB

PETALING JAYA: At a time when there is an increased level of cautiousness in the Johor property scene, a Chinese developer has inked an RM2.4bil deal with Iskandar Waterfront City Bhd (IWCB) to acquire 128 acres of land, a value that underscores one of the highest land transactions in the Iskandar region to-date.

A subsidiary of Shanghai-based state developer Greenland Holdings Group Ltd has established a joint venture (JV) with IWCB unit Southern Crest Development Sdn Bhd (SCD) to buy the land, which is mostly submerged, from IWCB for a sum of RM2.4bil.

The RM2.4bil deal works out to about RM430 per sq ft, which property consultants said set the benchmark for property prices in that area as there had not been any transaction of that size in that area previously. Most previous transactions were at Danga Bay, which is at the Causeway and near the Second Link.

The agreement is to acquire property and undertake the development and construction of a mixed development comprising commercial and residential components in Plentong, Johor Baru, via a special-purpose vehicle, Greenland Tebrau Sdn Bhd (GTSB).

Together, Greenland and Johor state government-linked company IWCB will develop an RM3bil new waterfront city on the land in Tebrau Bay.

The transaction comes amidst an environment where there are concerns of an oversupply of high-end condominiums in Johor. This has been evidenced by a lacklustre response from buyers for property launches in the Puteri Harbour area in the Iskandar Development region.

Iskandar Development is the authority overseeing the development of an area measuring 200,000ha in South Johor.

There are several companies undertaking the development, with UEM Sunrise Bhd being a key player. However, the recent poor take-up rate for the high-end condominium market was seen in a project at Tanjung Puteri Cove.

Apart from a vast hinterland waiting to be developed, more land is being reclaimed on the Straits of Johor near the Second Link, adding more supply of land for development.

This is particularly from the approval given to a JV between Country Garden Holdings Ltd and Kumpulan Prasarana Rakyat Johor (KPRJ) to reclaim and develop 1,368ha of land on the Straits of Johor to develop what is termed as the Forest City project that will be carried out on four man-made islands over a 30-year period.

In IWCB’s filing yesterday, it said its unit SCD would hold a 20% equity interest in GTSB, while Greenland Malaysia Real Estate Operator Sdn Bhd (GL) would hold the remaining 80%.

GL is a wholly owned subsidiary of Greenland Hong Kong Investment Group Ltd, which, in turn, is a 60%-owned subsidiary of the Greenland group.

KGV International Property Consultant executive director Samuel Tan said while more details were needed to determine if the deal was fair, it sent a strong signal to the investment market that Iskandar Malaysia was still a destination for property development in the long run.

“Development by foreign players is not confined to the usual Danga Bay, Medini Iskandar Malaysia and Nusajaya. This is good, as it will result in a more balanced geographical growth within Iskandar Malaysia,” he added.

It is learnt that IWCB chose the Greenland group, which is one of China’s biggest developers, because of its experience in building a city over a long term.

Already, some 13 local and foreign companies are actively involved in developing Iskandar Waterfront City in Danga Bay with a cumulative gross development value of RM125bil on the western corridor, which stretches from Johor Baru to Nusajaya.

“I now want to develop the Eastern Corridor of Johor Baru, stretching from Tebrau Bay to Pasir Gudang,” said Johor Mentri Besar Datuk Seri Mohamed Khaled Nordin in a statement.

Khaled envisions the Eastern Corridor to be South-East Asia’s new lifestyle destination, much like Australia’s Gold Coast.

The urban development of Tebrau Waterfront City will span a 15-year period and will feature a snow world theme park, an opera house, a hospital specialising in Chinese traditional medicine and a school.

“I welcome their long-term strategic interest to jointly transform Johor Baru into a modern international waterfront city and destination,” Khaled said.

IWCB is a listed entity which is 47%-owned by Johor-based Iskandar Waterfront Holdings Sdn Bhd (IWH). The Johor Government, via state investment arm KPRJ, has 40%.

The JV would enable IWH to leverage on its Chinese partner’s strength in mixed commercial development, including high-end hotels and residential towers, to reshape its waterfront land in Danga Bay and Tebrau Bay.

“We’ve undertaken urban development in over 80 cities throughout China. We’re keen to share the experience with IWH as our long-term JV partner and help transform Iskandar Malaysia into an international destination,” said Greenland group executive vice-chairman Xu Jing.

This is Greenland’s second investment in Iskandar Malaysia.

In April 2014, Greenland signed an agreement with IWH to jointly develop 13.6 acres in Danga Bay for RM600mil, comprising an RM2.2bil integrated mixed-property project, which includes the recently launched Jade Palace luxury condominiums.


Source: http://www.thestar.com.my/

China property developer Greenland Group iskandar project at Danga Bay

Iskandar Malaysia received another real estate investment from China property developer. One of China’s largest state-owned property developers, Greenland Group had follows other China property developers’ footsteps to grab the market pie of hot Iskandar property market. China property developers since then have been one of the biggest players in the Iskandar Malaysia integrated development after Malaysia and Singapore.

Greenland Group has sealed a deal with government-linked company Iskandar Waterfrot Holding Sdn Bhd IWH to acquired a plot of prime waterfront land in Iskandar Malaysia for RM600 million for a mixed integrated development.

The acquired johor land size of 13.96 acres at the Danga Bay area which is near to its peer current prime property developer Country Garden is expected to have gross development value GDV of RM2.2 billion. The successful of Country Garden maiden foray into Danga Bay has attracted many China property developers who wish to expand their footprints overseas after tightened restrictions on their own country. Media has reported that Country Garden achieved targeted property sales of RM10 billion with over 6000 units of new launch condo sold within 2 months after the new project launch at August 2013.

The land prices Greenland Group bought is the second highest in the record johor land sale transactions in Iskandar Malaysia at RM984.00 per square feet - just below the record RM998.00 per square feet that Hao Yuan Pte Ltd, a Singapore-based paid for 15 ha at Danga Bay last December. Sin-Hao Yuan Land aims to build the Malaysia tallest tower in Danga Bay as part of its iskandar project in Iskandar Malaysia.

A delegation from Greenland Group had visited Malaysia in February to explore real estate investment opportunities. Zhang Yuliang, Chairman of Greenland Group during his February visit said  that Malaysia has enjoy stable economic growth, high population demand, well connectivity within the region and Iskandar Malaysia is located at strategic location which near to Singapore separated by a causeway. These factors are the reasons for Greenland Group to invest at the Iskandar Malaysia.

Greenland Group was ranked 359 in the Fortune Global 500 company chart last year and listed as one of the top 10 property developers in China by Forbes with an estimated market value of US$7.6 billion (RM24.63 billion). Greenland Group has been on a buying spree in recent years with acquisitions of large scale real estate projects in New York, Los Angeles, Sydney, London and South Korea. The company is the builder of the 131-floor world’s tallest residential tower in Wuhan, China, and currently constructing another iconic 88-storey tower in Nanjing, potentially the seventh tallest building in the world.

IWH, a government-linked company, is the master developer of some 1,620ha of waterfront land stretching along the coastal line of Flagship A, Flagship B and Flagship C, which is the premium johor land area of Iskandar Malaysia.

Greenland Group will form joint venture vehicle with IWH for the GDV of RM2.2 billion iskandar project.

IWH said it plans to leverage on Greenland’s forte in integrated developments, including high-end hotels and residential towers, to help transform Danga Bay into an integrated international waterfront city.

“We believe the Greenland Group will pave the way for more China state-owned companies to invest in Iskandar Malaysia and our extensive waterfront johor land in Johor Baru,” said IWH.

So far, 16 local and foreign companies have committed to develop properties in joint venture with IWH with a cumulative GDV of RM125 billion. At least four other major China property developer are also negotiating with IWH for mixed integrated development featuring exclusive waterfront properties there.

GreenLand Group

GreenLand Group and IWH joint venture

IWH

Iskandar Project - Tallest Tower in Iskandar Malaysia

Iskandar Malaysia fetch new iskandar project with new record high land prices after the China property developer R&F Properties. Sin-Hao Yuan Land, a property firm linked to a Singapore property developer inked a deal with Iskandar Waterfront Holdings IWH to buy six parcels commercial land totalling 15ha in land size in Danga Bay for RM1.6 billion. The commercial land is located just next to the place of upcoming S$3.2 billion township joint develop by CapitalLand Malaysia and Temasek Holdings.

At RM998 per square feet (psf), the sale set a new benchmark for commercial land transactions in Johor Bahru, beating even the landmark RM4.5 billion deal between the Johor Sultan and China’s property developer R&F Properties, which was agreed land prices of RM891 psf.

Sin-Hao Yuan Land aims to build the Malaysia tallest tower in Danga Bay as part of its iskandar project in Iskandar Malaysia. The iskandar project have total gross development value GDV of RM8 billion, comprising of high end iskandar residences, commercial and retail properties. Sin- Hao Yuan Land is linked to Singapore property developer Hao Yuan Investment, controlled by Singapore permanent resident Du Zhen Zeng.

The iskandar project  will be built by joint venture with IWH, a Malaysia property developer which have the most Johor land in Iskandar Malaysia. Sin-Hao Yuan will have 60% stake in the joint venture vehicle, Pristine Sun Properties, with IWH controlling the rest.

Sin-Hao Yuan Land said the iskandar project will feature a “the tallest iconic tower in Peninsular Malaysia and a landmark tower in Iskandar Malaysia”. However, it did not specify the height of the planned tower. Currently the tallest tower in Malaysia is the 88-storey Petronas Tower in capital of Malaysia Kuala Lumpur, at 452 meter height.

The IWH executive director Mr Lim said he expects the upscale new developments to provide long term recurring income for both parties. Sin-Hao Yuan Land’s latest plan come on the back of rising China interest in Iskandar Malaysia. China property developer Country Garden have the iskandar project with Gross Development Value of RM18 billion, Zhuoda has joint venture with Iskandar Investment Berhad IIB to joint develop iskandar project in Medini and latest purchased of commercial land by property developer R&F Properties.

Breaking record land prices in Iskandar Malaysia

Johor land prices received historical record high in transaction yesterday. Johor Sultan Ibrahim sold 6 pieces of johor land within Special Economic Zone Iskandar Malaysia with the total land coverage of 116 acres to China Guang Zhou property developer R&F Properties with the total price of RM4.5 billion ( Malaysia Dollar). The land price was transacted at RM890 per square feet, breaking the record of land prices China property developer Country Garden bought for the johor land at Danga Bay with RM363 per square feet.

According to report submitted by R&F Properties to Hong Kong Securities Exchange, it bought the johor land at Iskandar Malaysia with above land prices after negotiation with Johor Sultan Ibrahim. Report said R&F Properties will pay RM100 million as down payment, and the remaining payment will be paid within following 3 years in four time method.

The Chairman of R&F Properties Mr Li said this is the company first oversea land purchase. He mentioned that Malaysia has large Chinese population and at the same time local government implementing policies that attracting foreign property buyers, so it is very suitable for the company first foray to oversea property market. “Malaysia has strong economic fundamental and supported by huge human population, its property market has strong potential growth.”

Since the launch of Special Economic Zone Iskandar Malaysia and efforts of IRDA, Iskandar Malaysia has successfully attracted many real estate investments in Iskandar development region which supported by surrounding highly developed country like Singapore and strong economic growth and high population country like Indonesia. Since the 2008 economic crisis, the economic weigh highly and shifting from west to east and Iskandar Malaysia attractive and investor friendly environment and policies allow Iskandar Malaysia become a bright star within South East Asia region. 

R&F Properties