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Thread: China company buys $1.8b property in JB

  1. #1
    Blue blood

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    Default China company buys $1.8b property in JB

    [URL]http://business.asiaone.com/property/news/china-company-buys-18b-property-jb[/URL]

    PETALING JAYA - [B]China-based developer Guangzhou R&F Properties Co Ltd is buying six plots of land in Johor Baru for a whopping RM4.5 billion (S$1.76 billion) from the Johor Sultan, making it a record deal.[/B]
    The investment, comprising high-rise residential units, low-density housing, retail properties, offices, a hotel and a shopping mall, is the Hong Kong-listed firm's maiden overseas venture.
    "Malaysia, with a sizeable Chinese community and favourable government policy attracting foreign purchasers, is well-suited for the first venture of the group outside China," said the company in a filing with the Hong Kong stock exchange.
    It also said it came to the RM4.5bil consideration through direct negotiation with the vendor and that its board considered the price to be fair and reasonable, given the market condition in Malaysia, location, development cost and potential of the land.
    The developer said it had paid a RM100mil deposit, which would be deducted from the first instalment payment of the consideration.
    According to Zerin Properties' chief executive officer Previn Singhe, the estimated sellable floor area of about 3.5 million sq m worked out to a plot ratio of 7.5 times, which is considered high, given that the land is worth about RM891 per sq ft.
    Previously, another developer from China, Country Garden Holdings Co Ltd, had bought 22.26ha in Danga Bay for RM376 per sq ft. Comparing both, Previn said the latter's plot ratio was lower at 5.22 times.
    "This is very good for Malaysia. Not only would it spur (our) real estate sector, but there would also be spillover effects in terms of other industries such as education, tourism, agriculture and many more.
    "We are now an investment hotspot for companies from China," he told StarBiz.

    Henry Butcher Malaysia president Lim Eng Chong said investors from China were buying property in Malaysia because of the infrastructure, relatively affordable health sector, education facilities and cheaper land cost here. .
    He said many small and medium-sized mainland China developers were positive about Malaysia.
    "China-based developers looking for businesses elsewhere are seeing Malaysia as an alternative investing destination, as the property prices in the markets that the mainland Chinese were familiar with, such as Taiwan, Hong Kong and Singapore, are beginning to cool down after having gone up considerably," he said.
    Based on his experience, he said, the latest property ceiling price of RM1mil for foreigners had little impact on these investors, as most of them preferred established high-end areas which were selling above that price.
    LBS Bina Group Bhd managing director Datuk Lim Hock San said: "In China, people are talking about Iskandar because of its proximity to Singapore. The high prices there have prompted investors to look at Malaysia as a cheaper alternative."
    Property analysts, however, are more cautious on the property market in the Iskandar region now due to high valuations and the possibility of an oversupply.
    Maybank IB Research analyst Wong Wei Sum pointed out that developers who emphasised on a fast turnaround and supplied a massive amount of similar products to the market could result in a glut.
    "It depends on how they are going to launch it."
    Guangzhou R&F Properties noted in the announcement that its preliminary plan was to develop the land in phases, but did not elaborate.
    Analysts also noted that the China-based developers could be targeting mainland Chinese as buyers for their properties and warned of the more speculative nature of such investments.
    - See more at: [URL]http://business.asiaone.com/property/news/china-company-buys-18b-property-jb/page/0/1#sthash.G4kOjUa0.dpuf[/URL]

  2. #2
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    This is insane , buying enough land to build 37,000 condos of 1000 sqft , all to be sold to investors ? there is going to be a mountain of empty units over in JB

  3. #3
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    going to follow the footsteps of spain property bubble

    [url]http://en.wikipedia.org/wiki/Spanish_property_bubble[/url]

    [url]http://www.youtube.com/watch?v=zIWfWyFd9f4&list=TLDruOWiE2O-8kBADm6ewqakIv1HGsjAaB[/url]

  4. #4
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    Quote Originally Posted by catsick View Post
    This is insane , buying enough land to build 37,000 condos of 1000 sqft , all to be sold to investors ? there is going to be a mountain of empty units over in JB
    I think the Chinese guys call it 'integrated townships', not just 37,000 condos. A bit like how Keppel Land does it in China. They are bringing that model over, with Country Garden leading the way.

  5. #5
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    Jaw dropping - plot ratio of 7.5 times!

  6. #6
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    johor sultan must be very happy for his birthday present
    once you pop, you can't stop, more to come

  7. #7
    Junior

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    How to soak up the supply?

  8. #8
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    it is a bubble ...

    In China there are tons of empty cities because normal citizen just cant afford to buy for own stay and those investors jack up the price.

    It is worse in this part of the world as we do not have enough volume to buy all these properties ...

    Lets see when the bubble pops

  9. #9
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    the new scam the seem to be running in iskandar is to rape you for data charges when you cross the border , I had just crossed over 30 minutes and I got an sms telling me I had already used $50 of data with the phone in my pocket , I have friends that got an over 500$ data charge for the phone in the pocket while in legoland ....

  10. #10
    Junior

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    how come johor sultan not on the list of richest malaysians?

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