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Thread: Iskandar Waterfront sells $615m land to S'pore firm for $3b project

  1. #1
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    Default Iskandar Waterfront sells $615m land to S'pore firm for $3b project

    PETALING JAYA - Iskandar Waterfront Holdings Sdn Bhd (IWH) has sold 15ha of seafront land in Danga Bay for RM1.6bil to a Singaporean firm, which is planning an RM8bil development featuring, among others, Peninsular Malaysia's tallest tower.

    The master planner for Danga Bay said in a statement yesterday that it had signed the sale and purchase agreement with Hao Yuan Investment Pte Ltd for six parcels of land, which would be developed by Pristine Sun Properties Sdn Bhd, a 60:40 joint-venture (JV) between Hao Yuan and IWH.
    The price tag of RM1.6bil works out to a land cost of 20 per cent of the RM8bil gross development value, within the range of 15 per cent-20 per cent typically paid to a landowner in Malaysia.
    At some RM998 per sq ft (psf), the sale set a new benchmark for commercial land transactions in Johor Baru, besting even the landmark RM4.5bil deal between the Johor Sultan and China's Guangzhou R&F Properties Co Ltd, which was agreed at RM891 psf.
    Hao Yuan has drawn up plans for several high-end residential, commercial and retail properties for its project, including the tallest tower in Peninsular Malaysia and a "landmark tower".
    Hao Yuan's portfolio in Singapore includes the Forestville Executive Condominiums, Sea Horizon and the Woodlands New Executive Condominium. The little-known firm is believed to be a China-linked company registered in Singapore.
    This marks yet another JV for IWH's Danga Bay land-bank, which is undergoing rapid development as part of Iskandar Malaysia.
    A spokesperson for IWH said he could not disclose details on the plot ratio, gross floor area and net saleable area of the project, but property executives estimate a plot ratio of up to 10 times, allowing its owners to extract maximum value from the prized land along Johor's coastline.
    IWH was also expected to ink more property deals in the coming months, as interest picked up in Iskandar Malaysia despite the curbs on speculation announced in recent months, market observers said.
    "Danga Bay hasn't seen much development in the past 20 years. Up to now, it's mostly been reclamation work," PA International Property Consultants Sdn Bhd executive director V. Sivadas told StarBiz.

    'There are only a few blocks of shoplots currently. It is good to have new and foreign developers entering the market and providing new ideas and products.
    "Danga Bay needs to be transformed and developed faster, and this is made possible by new entrants," he said.
    But Sivadas also underscored concerns about the pricing, which he felt would likely exceed what most of the local population could afford.
    "Almost every single development here is targeting the high-income group, which in Iskandar Malaysia isn't large, as well as foreigners. Whether this is sustainable is a question mark.
    "A lot of the hype in buying over the past two years is riding on the expectation of the MRT (mass rapid transit) being built, but this is many years down the line," he said.
    Johor Baru-based Sivadas added that he was puzzled by the proposed skyscrapers. "It doesn't make sense, considering that Danga Bay is a low-density township," he said.
    IWH, which is developing 1,700ha in Danga Bay, Desaru, Tebrau and Johor Baru, has shelved its US$300mil (RM957mil) listing to the final quarter of next year on worries that measures to rein in property prices could crimp demand from foreigners.

    http://business.asiaone.com/property...irm-3b-project

  2. #2
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    Wow, seems like Iskandar is getting really popular with developers !!
    The last time a China based company bought some of the land for $1.8b.

    http://business.asiaone.com/property...8b-property-jb

    and now a SG firm buys some for $615 mil.

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    There are still tall and empty malls and buildings in jb.....will there be more.....

  4. #4
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    Quote Originally Posted by JAFCO View Post
    There are still tall and empty malls and buildings in jb.....will there be more.....
    New areas are high risk and high return. Another land-banking by Chinese developers.

  5. #5
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    I believe the below article has been posted here before. I'm just trying to link the land-banking trend of Chinese developers in Singapore and Iskandar.

    Singapore developers build overseas as foreign firms splash out on land
    PUBLISHED DECEMBER 23, 2013

    [SINGAPORE] Singapore's mid-tier property developers are laying the first stones of their overseas business as domestic sales plunge, land prices climb, and foreign rivals bet high stakes on the city-state's long-term prosperity.

    Hiap Hoe Ltd and Oxley Holdings Ltd followed sector leader CapitaLand Ltd this year by going abroad. At home, government action to slow the rise of record-high prices led to a 50 per cent drop in third-quarter private home sales.

    Official plans for a significant supply of new homes over the next decade make the price outlook even dimmer. Yet land prices have rallied, pushed up by foreign developers drawn by political and economic stability. "The Singapore market is now very tough," said Teo Ho Beng, Hiap Hoe's chief executive officer. "Getting new land is a challenge, because there is so much competition." Hiap Hoe made its first foray abroad by buying three properties in Australia in the past four months. In coming years, most of its revenue will likely come from outside the island-state, Mr Teo said.

    Oxley Holdings bought property and invested in developers in Britain, Cambodia, China and Malaysia. Sim Lian Group Ltd added to its overseas portfolio by buying property in Australia.

    SingHaiyi Group Ltd, which earns 98 per cent of revenue in Singapore, bought two properties in the United States this year and appointed Neil Bush, brother of former U.S. President George W. Bush, as non-executive chairman. The company shifted focus to Singapore two years ago in response to property-price cooling measures in its native Hong Kong.

    CHALLENGED ON HOME TURF

    Seventy-two developers participated in this year's nine private residential-use land auctions, including at least eight from abroad. That made 2013 the most competitive year since at least 2008 in terms of average number of bidders per auction, showed data from the Urban Redevelopment Authority of Singapore.

    Local developers outbid foreign rivals and their partners in five of the nine auctions, their lowest win ratio in at least five years.

    Kingsford Development Pte Ltd, from China, bid at four of the auctions and won two. In one of the auctions it offered as much as 16 per cent above the bid of the closest competitor, despite soft home sales at its maiden Singapore project on a site purchased last year. "We have confidence in the Singapore market," said Victor Yao, Kingsford's senior business development manager and architect. "Singapore's government is very good at maintaining property market stability." Strong rule of law, a steady economic outlook and cultural similarity made Singapore ideal for Kingsford's first sally abroad, Mr Yao said.

    China's property market has been shaken in recent years by government measures to curb runaway prices, leaving developers wary of further intervention. "The profit margins here aren't as good as in China, but the market is more stable," Mr Yao said.

    The other two foreign winners were subsidiaries of Metallurgical Corporation of China Ltd and Malaysia's Sunway Bhd.

    GROWING LAND MASS

    The URA's Private Residential Property Price Index has climbed over 30 per cent since the end of 2009, rising 3.9 per cent in July-September from a year earlier.

    Sales, however, nearly halved to 2,430 units after the government in June curbed personal housing loans. That compared with 4,538 in April-June and 5,916 a year earlier, URA data showed. "Developers are beginning to cut their prices in existing and new projects," City Developments Ltd said in its quarterly results.

    Yet land prices have risen on an island smaller than New York City. Singapore has grown over 20 per cent in the past 50 years and the government projects an extra 8 per cent growth by 2030 to accommodate economic activity.

    OVERSUPPLY

    Every five years, the URA issues a land-use plan for the next 10 to 15 years. A draft last month showed land reserved for up to half a million mostly public homes, enough to house 2 million people. Public homes can be sold in the open market after varying years of occupancy.

    This has exacerbated concern of oversupply as the government projects population growth of up to 1.6 million people, or 30 per cent, to 6.9 million by 2030 from 2013.

    The government regards current supply as "adequate" while the Real Estate Developers' Association of Singapore said it supported the government's "calibrated approach". "For the next five years, everyone is feeling concern whether our residential supply will be too much," said Alice Tan, head of consultancy and research at Frank Knight. - Reuters

    http://www.businesstimes.com.sg/brea...-land-20131223

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    Quote Originally Posted by hyenergix View Post
    New areas are high risk and high return. Another land-banking by Chinese developers.
    Spot on. I predict that in years to come we'll be talking about the super bull run, that at some time will crash and end in tears.

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