Demand for luxury houses seen to be flattish

(Published in the Star Biz 21st Feb 2012, page 3)

By THEAN LEE CHENG 

PETALING JAYA: Demand for houses priced around RM1mil has dropped and is expected to be flattish throughout this year, a reflection of real estate transaction volumes across the Asia-Pacific, an online survey in Malaysia and a Hong Kong-based report show.

External uncertainties, the general election factor on the local front and a general wariness about a possible bubble in the Malaysian market had dampened the market, said iProperty Group chief executive officer Shaun Di Gregoria.

“We are seeing a reduction in volume for the top-end market. Rental is also expected to come off a bit for the top end,” he said after launching the result of an online survey at iproperty.com.my conducted from Dec 5, 2011 to Jan 19, 2012 involving 3,459 respondents.

The findings are supported by telephone interviews with two property agents.

Despite that, Di Gregorio said, Malaysians were expected to continue to be upbeat about the property market, with interest seen mostly in properties priced between RM400,000 and RM500,000.

The survey revealed that 35.7% of the respondents considered themselves property buyers while 26.2% identified themselves as property owners.

This is part of the first cross-market online property survey conducted by the iProperty Group covering Singapore, Indonesia, Hong Kong and Malaysia that attracted about 8,500 respondents.

Di Gregorio said although various measures had been taken by the authorities to discourage speculation, the Malaysian property market continued to be friendly to buyers.

He said Malaysia was the number one destination for Singaporeans as property prices here were still affordable to them.

“Yield in Singapore and Hong Kong is low because of the high capital cost there. The United States and Europe have their own challenges, so South-East Asia will increase in popularity, with Malaysia being a good market to be in throughout this year. There is positive sentiment to invest here,” he said.

About 40% of the Singaporean respondents said Malaysia was their preferred destination, followed by Australia (19.4%).

Meanwhile, about 40% of Malaysians considered Australia as their preferred overseas property investment destination, 19.8% liked Singapore and 13.7% chose the United Kingdom.

While iProperty Group paints a positive picture of the local property market, 58.6% of those who responded to the survey in Malaysia believed there is a property bubble in this country versus 53.85% of those who responded in Singapore.

On a larger scale, the drop in transaction volume is also reflected in the Asia-Pacific. A quarterly report by the Asia Pacific Real Estate Association (APREA) and Real Capital Analytics said there was a 32% drop in real estate transaction in the Asia-Pacific year-on-year to US$85.3 bil as at Dec 31, 2011.

“It moderated by as much as 18% since the end of the third quarter last year,” APREA said in a statement.

“Concerns over the eurozone debt crisis contributed to the moderation in the fourth quarter. A strong performance by Singapore helped mitigate the declines in other countries,” said APREA chief executive officer Peter Mitchell.

The decline was seen across all industry segments. Transactions in hotels fell 23%, commercial property 20%, land 17%, and apartments 8%. Stripping out land transactions, Japan led in regional sales volume, accounting for 22% of the fourth-quarter sales. This was followed by Australia with 17% and Singapore, 16%.

“Transactions in the region are continuing to be dominated by domestic players,” Mitchell said.

ISKANDAR GLUT WORRY

(Published as headline in the Star Biz 15th Feb 2012)

Johor property market may face oversupply in the longer term

By JOHN LOH 

PETALING JAYA: With the spate of big-ticket projects being launched in and around Johor's Iskandar region, such as Iskandar Waterfront Holdings Bhd's RM80bil transformation of the coastline fronting Singapore, there are concerns that a glut could emerge in the state's property market down the line.

Although an oversupply in the near term was unlikely, valuers and agents said it could materialise in a decade or later as the developments there would have a long gestation period.

“It is a cyclical industry. There could be an oversupply but this will not be for another 10 years,” Zerin Properties chief executive officer Previn Singhe told StarBiz.

Johor Baru-based V. Sivadas, executive director of PA International Property Consultants Sdn Bhd, pointed out that a glut was imminent if buying interest from Singapore, which has thus far led demand, dried up.

“Malaysia's existing population will not be able to absorb all the new properties on their own,” he said.

He noted that if the proposed high-speed rail between the two countries was fast-tracked, it could create an “instant demand” for Johor properties as the two existing highways linking Malaysia to the island state faced heavy congestion.

Another crucial factor, he added, was for the authorities to craft a long-term asset policy that would not dampen interest from foreigners, yet prevent the kind of artificial inflation of prices caused by speculative buying.

Last year, the Singapore government moved to cool its property market by imposing a 10% stamp duty on homes bought by foreigners, effectively raising the purchase price by 10%.

Foreigners, spurred by low interest rates, had snapped up about 9,300 private homes there in 2011, making it a record 31% of all transactions.

While a surfeit in residential properties may not be for some time, CB Richard Ellis (Johor) Sdn Bhd director Wee Soon Chit has some concerns about the service apartments sector.

He said there had been a sudden increase in the supply of service apartments in Johor, which might not be consistent with demand.

Sivadas also observed that service apartments were fetching between RM500 and RM600 psf now, their highest ever.

One thing is for sure the development of Iskandar has led to a marked appreciation in property prices in Malaysia's southernmost state.

UEM Land Holdings Bhd's Imperia@Puteri Harbour, the group's first residential development there, has sold 152 units, or 65%, since its soft launch last September. Singaporeans bought 90 of these units.

CIMB Research said in a report that the original selling price was RM545 psf, but this has risen to between RM700 and RM980 psf, which was a premium over the RM400-RM450 psf price for condominiums in neighbouring Kota Iskandar and Medini.

“One of the semi-detached houses in East Ledang (also by UEM Land) sold for RM1.6mil. This is a new benchmark,” Wee said.

Sivadas explained that all the new properties were priced above the RM400,000 level, and only the older homes could be bought for less than that.

“The prudent investors have mostly purchased completed apartments. It is the speculators who are going after the new launches,” he said.

However, he cautioned that Iskandar as a whole still had a long way to go.

“It will take another 50 years for it to be fully realised. Even though there are lots of plans and it looks good on paper, implementation remains the key.

“Various plans for Johor's development were unveiled years ago, but the Johor Baru skyline has not changed much. What has taken off is just a small percentage of what has been promised,” he said.

Property prices spike in Shah Alam

PROPERTY prices in Shah Alam have climbed steadily over the last five years due to a combination of factors, including highway accessibility, said a real estate expert.

Azmi & Co director T Nagalingam said Shah Alam is experiencing spillover effects from the rise of property prices in areas like Subang Jaya, Glenmarie, Bukit Jelutong and Kota Kemuning.

He told Business Times that prices for double-storey terraced houses and condominiums have increased by 50 per cent and about 20-30 per cent respectively, in the last five to six years.

"Traditionally, Shah Alam was occupied by PKNS townships. Now, more players have emerged in Shah Alam such as Glomac Bhd, Naza and I-Berhad lifting up the area," he said.

Nagalingam said the New Klang Valley Expressway, Guthrie Corridor Expressway and the widening of roads have contributed to population growth and the price increases.

I-Berhad is developing i-City in Section 7, Shah Alam, sprawled over 30 hectares.

The 10-year development will feature some 12 million sq ft of gross lettable area for a total gross development value of RM4.5 billion.

Some 35 per cent of i-City will comprise residences. The rest will be offices, commercial and retail space, hotel, convention centre and a technology hub.

Since the project started about four years ago, some 500,000 sq ft, or 366 offices suites, and a 70,000 sq ft data centre have been completed.

To date, 20 per cent of the land area has been developed and it has been successful being an MSC Cybercity with complete information communications technology infrastructure.

The development is provided with dual source power supply, multi-telco environment and super broadband accessibility of 200mbps.

-Business Times

http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=28160:property-prices-spike-in-shah-alam&Itemid=3

Brunsfield joins IWH to develop Johor project

(Published in 1st page of Star Biz 14th Feb 2012)

By RISEN JAYASEELAN 

PETALING JAYA: The Brunsfield Group is the latest property developer to have inked a deal with Iskandar Waterfront Holdings Bhd (IWH) to develop a parcel of land close to the waterfront area in Johor Baru, industry sources said.

The source added that the development to be undertaken by Brunsfield and IWH would have a gross development value of around RM3bil.

“There are other major developers also firming up joint ventures with IWH. The growing interest in IWH is phenomenal,” said the source.

Brunsfield is known for a number of high-end development projects including building 20 exclusively designed bungalows in Damansara with price tags of RM3,000 per sq ft or more than RM30mil a unit and the 93 exclusive low-rise luxurious condo villas named Brunsfield Residence @ U Thant. It is also well-known for its joint ventures with Sime Darby Bhd, involving projects such as the RM250mil Subang Avenue, the RM550mil Oasis Damansara and the redevelopment of Oyster Cove, one of the most exclusive waterfront resorts on Australia's Gold Coast.

In an interview with StarBiz last week businessman Datuk Lim Kang Hoo, major shareholder and who helms IWH, said that IWH would be the master developer of the area and it aimed to attract established world class developers to undertake different parcels. These parties are also expected to part fund the entire development, bringing in the much needed foreign direct investment.

He declined to comment on the Brunsfield deal when contacted yesterday.

But Lim had said the project had received enquiries almost on a daily basis from both local and foreign developers.

So far, IWH has attracted local investor Dijaya CorpBhd, which is investing RM3.8bil in a high-end mixed development project over 15ha.

Singapore's Azea Residences will work on four blocks of high-end apartments at a cost of over RM500mil. Australia's Walker Group has also partnered with IWH to develop Senibong Cove into a high-end residential development modelled after the Hope Island project in Australia's Gold Coast.

Stretching 25km to the east and west of the Johor Causeway, the newly-launched Iskandar Integrated Waterfront City (IIWC) project in Danga Bay is the result of an integrated master plan that would see the complete makeover of Johor Baru and seafront sites facing Singapore.

The development, to be launched in phases over 25 years with a gross development value of RM80bil, would be a public-private partnership involving the Government and IWH.

IWH is a special purpose vehicle created to become the master developer and planner of a 1,200ha site within Flagship “A” (in Johor Baru city centre) of Iskandar Malaysia. IWH shareholders are Kumpulan Prasarana Rakyat Johor and Credence Resources Sdn Bhd, whose majority shareholder is Lim. Khazanah Nasional Bhd and the Employees Provident Fund, via their holdings in Iskandar Investment Bhd, are also shareholders of subsidiaries and associate companies of IWH.

Slower high-end property sector

(Published in the Star Biz 13th Feb 2012, page 4)

By EUGENE MAHALINGAM 

PETALING JAYA: The Malaysian Institute of Estate Agents (MIEA) expects a slowdown in the high-end residential property sub-sector this year as potential buyers are likely to maintain a cautious approach in light of the economic uncertainties in Europe and the United States.

“There is a lot of caution now due to the uncertainty in Europe and the United States. With fear of a potential spillover effect, most buyers are adopting a wait-and-see' approach,” said MIEA president Nixon Paul.

“We don't expect to see any slowdown for property transactions within the RM300,000-to-RM600,000 range and believe there will still be a lot of activity within this segment.”

Paul said the various “checks and balances” by Bank Negara to control the increase in household debt would also affect residential property transactions.

Starting this year, banks have been using net income instead of gross income to calculate the debt service ratio for loans.

According to reports, this is a pre-emptive move by Bank Negara to contain the rise in consumer debts. The guidelines cover housing, personal and car loans, credit cards, receivables and loans for the purchase of securities.

The MIEA is the authorised body representing all registered estate agents in Malaysia.

Paul said there was an over-supply of condominium units in the country and that rental rates for such units could be affected.

Despite this, he said, it would be a good time now to invest in the high-rise market for long-term investors.

“We are one of the cheapest in the region and if you are looking to invest over the long term, say 10 years, now is a good time to get into the condominium market. Over the next decade, prices will appreciate.

“But if you're dependent on rental income to service your loan, I wouldn't advise it.”

Paul noted that rising property prices in Malaysia had forced many people to buy homes further away from the city.

“I do feel sorry for the average guy, but if you look anywhere else in the world, it's a natural progression. Those who can't afford it live further away from the city.

“It's happening in cities all over the world. Out of necessity, you'll see more people buying condominiums instead of landed property.”

Paul said one of the main issues facing residential property transactions today was the big disparity between the intended property price and valuation price.

“A buyer and seller might agree on a particular price but the valuation might not be the same. When that happens, the loan application procedure becomes a problem and the deal ends up getting aborted,” he said.

Separately, Paul said the commercial property sub-sector would be buoyant this year.

“It's going to be a buzz! Most investors are shifting to commercial from residential because they feel this sub-sector is more resilient, especially in a downturn,” he said, adding that there was pent-up demand for commercial property in Malaysia.

“We believe that the industrial sub-sector will also be quite active. Property prices in Bukit Jelutong and Glenmarie are at an all-time high.”

Paul said the office sub-sector might face a slowdown due to oversupply in space.

“There is an oversupply of office space. Rentals in prime locations such as KLCC may not be affected but not those located in the outskirts of the city,” he said, adding that major shopping complexes, especially within Kuala Lumpur, would continue to experience good take-up this year.

Despite the global uncertainty, Paul said that property was still the “best place to invest in.”

“It's still the safest place to put your money in. These days, a lot of people are shifting their investments into property. You can hedge yourself well against inflation when you invest in property,” he said.

MRT project seen benefiting big and small companies

(Published in Star Biz 14th Feb 2012, page 2)

PETALING JAYA: The My Rapid Transit (MRT) project is expected to benefit almost all levels of companies in the construction sector but competition will still be stiff, according to analysts responding to the complete list of more than 80 work packages for the country's biggest infrastructure development that was recently made public.

An analyst said looking at the complete list, it would surely benefit big and small construction players but the competition would be stiff.

“This (competition) is expected to influence the margins of the packages. For the evelated civil or viaduct works, I expected the margins to be in the range of low to middle single digits while the tunnelling works is expected to have margin in the range of high single digit to early teens,” he told StarBiz.

Another construction analyst said the project was likely to take up significant capacity in the local construction industry.

“Nevertheless, what's more important is that while it is good to come up with the complete works timeline, keeping to the scheduled timetable is another matter.

“We just have to wait and see,” he said.

Meanwhile, HwangDBS Vickers Research said the next anticipated awards were for the other elevated civil works packages that included V4 (Section 16 Petaling Jaya to Semantan portal), V1 (Sungai Buloh to Kota Damansara), V2 (Kota Damansara to Dataran Sunway) and V3 (Dataran Sunway to Section 16) where tenders would be called in the second quarter and the awards would be in the third quarter of this year.

“We expect contract sizes to be chunky for each package at between RM700mil to more than RM1bil,” it said in a report.

There will be open and bumiputera categories, whereby the listed beneficiaries for the open category include Sunway Construction,Mudajaya Corp, Muhibbah Engineering, IJM Corp, Malaysian Resources Corp and Gadang Engineering.

The bumiputera category-listed beneficiaries include Naim Engineering ,Trans Resources Corp, TSR Capital, Ahmad Zaki Resources and Dekon.

MRT Co discloses detailed contracts list

(Published in the 1st page of Star Biz 13th Feb 2012)

PETALING JAYA: Mass Rapid Transit Corp (MRT Co) has issued the much-awaited detailed list of packages for the construction of the Sungai Buloh-Kajang line, including when the tenders will be opened, the evaluation and award periods as well as the estimated completion time of the said projects.

The list, containing more than 80 work packages, also details the particular packages that are meant for bumiputra contractors and those are open to all contractors.

MRT Co CEO Datuk Azhar Abdul Hamid has stated in the past that the rationale for providing this list was to ensure a level of transparency and openness.

In yesterday's press release, MRT Co said it was confident that the construction work packages for the Sungai Buloh-Kajang line would provide a boost to earnings to the construction sector in 2012. It added that there were still over 80 work packages up for tender, from the total of 90.

“MRT Co is optimistic that as the My Rapid Transit (MRT) project moves from the initial planning to implementation stage, the construction sector will benefit from the various opportunities available in ground works, mechanical and electrical, ICT systems, viaducts, stations and many others,” said Azhar in the press release.

“Our aim is to raise awareness and interest in the amount of work available in the MRT project, and to engage the contractors in the best possible manner to share the project's work progress. Let me state unequivocally that MRT Co would like all qualified contractors, especially bumiputra contractors, to take part in the transparent and open tender process to bid for the many work packages that are being made available.

“MRT Co also said that based on infrastructure projects of this type and magnitude, the Government estimates the construction multiplier impact will be in the region of 2.5 times, which translates to approximately RM213bil flowing into the economy till 2020. It said that this is based on the impact of money going into the economy from the construction of the three MRT lines, the stations and the rolling stock.

“By publicly announcing the tender and award schedule for the various work packages, MRT Co believes it will dispel any perceptions that the call and award of tenders are being conducted under a veil of secrecy. Let it not be said that we have not reached out and made information available for the benefit of these contractors, especially bumiputra companies. It is our intention that all works packages will be subject to competitive bidding. All bidders will be given the same project information and evaluated on the same basis, i.e. technical, track record and financial terms.”

The value of construction work for the MRT project to be allocated on merit to bumiputra contractors. was 43%. “I would like to strongly encourage all contractors to prepare their bids for timely submission.

“Rest assured, we will closely scrutinise all costs and delivery of this crucial national infrastructure project for the benefit of the Malaysian public. Any feedback can be emailed to feedback@kvmrt.com.my,” said Azhar.

IOI mulls relisting of arm

(Published in the Star Biz headline on 13th Feb 2012)

By RISEN JAYASEELEN and DANIEL KHOO 

PETALING JAYA: IOI Corp Bhd is mulling a relisting of its property arm that would see the group unlock values in that segment and enhance the attractiveness of the parent company to investors as a more plantation-focused company, according to reliable sources.

“The group is in discussion with two investment banks on this to get feedback, especially on the right timing of the exercise,” said a source.

Analysts said the relisting of its property division would increase the stature of IOI Corp as a pure plantation play which would likely have higher valuations.

“It will reduce the conglomerate discount and transform IOI Corp into a pure plantation play, with a controlling stake in a valuable property company IOI Properties. Sole industry companies usually tend to fetch higher valuations,” an analyst with a local bank-backed research house said.

IOI Corp may wish to also time the relisting of its property arm in line with a more bullish view on the property sector.

In a sales note to its clients issued in January, Maybank IB said that potential downsides had already been priced into the property sector and that it did not discount the possibility of raising its call on the property sector from “neutral” to “overweight” in the medium to longer term as developers today were “backed by considerable unbilled sales, providing near-term earnings visibility.”

IOI Corp had privatised its arm in 2009. Then known as IOI Properties Bhd, IOI Corp had on Februuary 2009 launched a takeover offer at RM2.60 per share.

The takeover was successful and IOI Properties was subsequently delisted on April 28, 2009. It is today wholly-owned by IOI Corp. IOI Corp has been actively growing its property business since.

In January it acquired six acres of land in Singapore for RM995.5mil to build high-end condominums and will have to settle the entire amount to the government of Singapore within 90 days from the date of the tender acceptance letter.

Presently, it has seven projects which it is developing locally with estimated gross development values (GDVs) of almost RM20bil.

Properties can testify to its track record in building property projects that have sold well. Excluding the latest land buy in Singapore, it is also presently developing high-end projects in the southern neighbouring island state with GDVs close to RM6bil.

IOI Properties has completed property development projects in Puchong, Putrajaya, southern Johor and Singapore before.

Meanwhile, banking sources also said that IOI Corp was in talks with banks to raise more funds.

“It is in a good position to do so, considering its huge cash flows from its plantation side of the business,” said one banker.

The funds raised should give IOI Corp sufficient funds to not only pay for the Singapore land acquisition but also ready funds in the event it chooses to buy more assets such as plantation land.

Based on its results for the first quarter ended Sept 30, 2011, IOI Corp had total short and long-term borrowings of RM688.24mil and RM4.87bil respectively. Most of these debts are denominated in the US dollar, the Singapore dollar and the yen.

IOI Corp had cash and cash equivalents of RM3.22bil as at Sept 30, 2011.

Award of all LRT extension jobs by H1

(Published in the Star Biz 13th Feb 2012, page 5)

PETALING JAYA: Syarikat Prasarana Negara Bhd hopes to award all LRT Line Extension contracts by the first half of 2012.

Group director for project development Zulkifli Mohd Yusoff said the entire project consisting of the Kelana Jaya line and the Ampang line had between 40 and 50 contracts.

To date, about 80% to 90% had been awarded while only two stations and the main depot for the Ampang line were still undergoing the process of tendering, he told reporters here yesterday.

According to Zulkifli, the total value of contracts that have been awarded for both lines currently stood at RM4.5bil.

For the supply of 20 trains for the Ampang line, estimated to be worth RM1bil, the company was evaluating seven supply submissions, Zulkifli said.

The other system contract yet to be awarded was for electrical and mechanical system works, he said.

“The system side involves installing power supply, track work, signalling and so on. 

Bernama.

IWH to be master developer

(Published in the Star Biz 10th Feb 2012, page 2)
PROJECT WILL COVER DANGA BAY IN THE WEST AND TEBRAU IN THE EAST

THE word “kang” (pronounced as chiang in Mandarin) means straits and “hoo” or “her” means river and somehow Datuk Lim Kang Hoo is fated to be digging rivers. He has spent close to a decade digging up the three rivers that converge to become a waterfront city as part of the Danga Bay project.

He explained that it has been one exhausting process to clear layers of mud and sludge and tonnes of rubbish but today many appreciate the serenity of a park that has been developed nearby, a bay area for yacht as well as commercial and residential areas in Danga Bay. The job is far from over and detractors have questioned why the entire redevelopment of the area was taking so long. Lim is also at the centre of a recently-announced consolidation exercise where a vehicle called Iskandar Waterfront Holdings Bhd (IWH) will become the owner of all major property development spanning the east to west of the waterfront of Johor Baru city. Lim, through his vehicle Credence Resources Sdn Bhd, will have 60% of this vehicle with the balance 40% to be held by the Johor state, in a pioneering private public partnership attempt. Their goal: transform the entire southern tip of Johor Baru into a waterfront city that would be remembered for decades. But would it work?

StarBiz deputy news editor B.K. Sidhu spoke to Lim in his office in Danga Bay yesterday. Below are excerpts of the interview:

StarBiz: What was the rationale for IWH buying a stake in Tebrau Teguh Bhd?

Lim: As you know, we have been developing Danga Bay since the 1998/99 economic crisis. Then we saw it as an opportunity as the location was good for an integrated waterfront city though there were heaps of rubbish and sludge that we had to clear before we could build anything. To be frank, it was worse than the Gombak river. And until today we are still digging and cleaning and in all, we also had to reclaim land to create what we had in mind.

The Danga Bay area is next to the Iskandar Corridor, which is on the west side of Johor Baru, but in order to expand to the east to complete the loop, we needed to work with someone else. We also needed to expand into the east for the lifestyle portion.

In the middle is the central business district (CBD) development which will be turned into a heritage city to attract international tourists. So with Tebrau, we would have a complete strip spanning from west to east. It is a big task but we are very grateful that the state government is supporting the entire Iskandar development master plan and we have formed a public-private partnership to develop the whole area.

It is such a huge development that would benefit the local community and the developers.

There is a perception that KPRJ is selling its state-owned assets to private parties like yourself.

The Johor state government is not selling out. It is just consolidating its interest into the holding company. This is a private-public partnership. I am also injecting my own assets into IWH.

Would Tebrau remain listed?

It would, and we like to keep it like this.

Why did Kumpulan Prasarana Rakyat Johor choose to work with you?

We have proven ourselves in understanding and undertaking water development projects and we have never run away from any job from the day we proposed it despite the challenges. What we are doing is planning and building for our future generations.

Actually, I am a very bad businessman as I am still with the project. Many other property developers would have made so many houses and sold them during this time but I am still working on this project.

Would IWH be listed?

One day, we are still preparing. It would be listed.

You talked about being master developer and to get investors to develop parcels, are they coming?

We have some, such as Dijaya Corp, the Azea Group of Singapore, Waz Lian Group and also Australia's Walker Group. They are all undertaking some development on our landbank. We are aggressively going out to attract investors. That is also why we are consolidating the landbank under one holding company. With the new structure, people will know who we are.

Some property developers think we are their competitor, but we are not. We are not doing townships, we are a master developer and we want to work with local and foreign developers. They are our clients and by undertaking the Danga Bay project we wanted to show them that it could be done. We had to take the lead and invest first.

Since last year we are getting a lot of enquires after the two governments (Malaysia and Singapore), resolved the POA agreement, and every day there are several parties coming to take a look at our landbank with a view for investment.

You have been on the Danga Bay project for a long time and some people think you have not lived up to expectations.

The first thing we have to do is to clean up the area and that took a long time because it is not easy getting the mud, sludge and rubbish out.

We have thus far completed the entire infrastructure and while you may say that we have taken a long time, the real rush to grab land in Johor is only happening now.

Today, we have created a park, some commercial and residential units, a yacht bay and more development is coming up. Ours are long-term projects and it may take up to the next generation to complete all that we have designed.

What we like to see is a waterfront like that of Sydney Harbour or even Hong Kong.

This is why the Government agreed to form a private-public partnership with us. As for infrastructure, there is now a six-lane highway connection from two-lane previously.

Did you get the land for Danga Bay free from the Government?

Never, the land is not given to us, we bought it over with its liabilities.

When did the actual work for Danga Bay begin?

It only began in 1999 and the infrastructure and cleaning has cost us RM280mil while the residential and commercial gross development value is about RM400mil.

When do you expect the full completion of Danga Bay?

The urban planning design is for 2,000 acres. It is a long-term development ... there are many phases. We are the master developer and we need developers and investors to come in to develop parts of the land and it would take a long time; maybe the full completion would not be in my lifetime.

What is the property market outlook in Johor?

It is only since the end of 2011 that we are seeing large numbers of local and foreign developers rushing to invest in JB.

This is something we have not seen in the last 15 years. Today we see the big, medium and small developers in town. That is a good sign as people are rushing to buy up land for future development.

Property prices from housing to land prices are gradually going up and all these investors that are coming in are the early birds. We have not seen the real big boom in the property sector.

Is the land bank under-valued?

It is still an early bird price when compared with prices in Singapore and Kuala Lumpur. There is still room for improvement and we believe more investors and developers will come in.

What is delaying the waterfront projects?

If you look at history, all water front cities have a history of 100 to 200 years. We have just started and to see the transformation it may take generations. But somebody has to start it.

How will Ekovest benefit from this development in JB?

Ekovest is very focused on design, construction and building infrastructure projects. Obviously with Iskandar, which is a huge project, there are plenty of opportunities to participate in the building of infrastructure. Of course like everything else, there is a tender process, it would be an open tender basis where everyone can participate and Ekovest can be one of them.

You are said to be close to the Johor Sultan.

Like any businessman, we have friends all over and whoever is the leader, we need to know and respect them.

Are you also involved in the Tanjung Piai project?

I have nothing to do with that project.

Once upon a time you were linked to buying Kulim. Was there any interest at all?

How can I take over a company as big as Kulim? If it belongs to me, I would be very happy.

As a master developer, where is the entire financing coming from?

That is why we need investors, local and foreign, to invest in it. It can be PNB, EPF or any developer that wants to be part of the project.

How did you start?

I have been in business for 40 years and started from doing small renovations to big renovations. I was also involved in plantations with Felda and from there we just learn and moved on. Slowly, we started getting bigger contracts and everything just got bigger. But it did not come easy, it has been a lot of hardwork and years of experience.

We did jobs everywhere from Lahat Datu to Pahang and Kuala Lumpur to Johor. Nowadays I spend about 70% to 80% of my time here in Johore. Once you have a vision, you have to look towards achieving it.

Coastline Makeover

(Published as headline in Star Biz 10th Feb 2012)

Johor in RM80bil joint venture with Lim to build waterfront city

JOHOR BARU: Johor Baru's coastline fronting Singapore is in for a major transformation that will have a gross development value (GDV) of some RM80bil and led by a joint venture between the Johor state and businessman Datuk Lim Kang Hoo.

A new vehicle called Iskandar Waterfront Holdings Bhd (IWH) is being created and it would be injected with massive landbank hitherto mainly owned by the Johor state and Lim. As a result of these injections, Lim would have 60% of IWH while the Johor state, through its vehicle Kumpulan Prasarana Rakyat Johor (KPRJ), would hold the remaining 40%.

The straight-talking Lim, who granted StarBiz an interview after numerous calls were made to his office, also didn't rule out the listing of IWH.

“We are still preparing for it ... One day it will be listed,” he said at his modest office in downtown Johor Baru.

He said the development would be undertaken over several years and would become a major economic engine of growth for the state.

IWH will oversee the development of the valuable landbank stretching 3,000 acres from west to east of southern Johor Baru to be transformed into an integrated waterfront city.

One of the assets being acquired by IWH was a 33.15% stake in Tebrau Teguh Bhd held by KPRJ. This led to concerns that the state was hiving off its assets to Lim.

“It's a misperception. This is a consolidation exercise to put all the landbank into the holding company. In the end, what KPRJ will have is joint ownership of a much larger pie than what it had before,” he said.

“We and KPRJ are the master developers and we will take charge of the development of Danga Bay, Iskandar Waterfront, Tebrau Coast and the central business district development in Johor.

“To have a project of this size, the need for a strategic partnership with the state is necessary,” Lim said.

The entire waterfront project is part of flagship A of the massive Iskandar Malaysia development, which is spearheaded by Khazanah Nasional Bhd.

“The partnership we have entered into is driven to enhance the development of the southern tip of Johor which is the gateway to Malaysia from Singapore,” Lim said.

A key component of the project is for IWH to attract established world class developers to undertake different parcels. These parties are also expected to part fund the entire development, bringing in the much needed foreign direct investment, said Lim.

“We are aggressively trying to attract more local and foreign developers to invest in Johor. We are not into building townships but we want property developers to be our clients to develop the landbank we have,” he said.

The company has attracted developers such as Dijaya Corp Bhd, Singapore's Azea Residences, Plazzo Hotels & Service, Waz Lian Group, Tune Hotel and Australia's Walker Group.

It has been reported that Dijaya has committed to invest RM3.8bil to build a high-end mixed development while Singapore's Azea Residences will work on four blocks of high-end apartments at a cost of over RM500mil. Australia's Walker Group has also partnered with IWH to develop Senibong Cove into a high-end residential development modelled after the Hope Island project in Australia's Gold Coast.

Lim said the project had received enquiries almost on a daily basis from both local and foreign developers.

“The interest level we see now is nothing like what we have seen in the past 15 years. We are swamped with serious enquiries and over the past year we have seen every developer from Malaysia going to Johor Baru and also some very big names from abroad,” he said.