Johor Bahru is in the process of physical transformation. And the hottest property man in play, Tan Sri Lim Kang Hoo, came out to tell the game plan.
Saturday December 8, 2012
Iskandar Waterfront Holdings gets the task of remaking Johor Baru
By B.K. SIDHU
Connection to the past: Johor Baru’s old bridge.
TAN Sri Lim Kang Hoo was beaming with excitement to show off his grand plan for the makeover of Johor Baru when StarBizWeek met him for an interview recently.
He had just got the plans approved for the makeover of the central business district (CBD) and the eastern side of the tip of Johor Baru (JB). The makeover of the CDB will change the face of several streets such as Jalan Wong Ah Fook, Jalan Segget, Jalan Ibrahim, and Jalan Meldrum which now house buildings that have been abandoned for a long time.
In his opinion, and that of others, JB has not recovered from the property glut after the 1997 Asian economic crisis.
On the eastern side or the Tebrau coast, he wants to create a lifestyle haven similar to that of the Gold Coast in Australia. He is hoping to attract expatriates who are going to work at the oil and gas hub that is taking shape in Pengerang to reside at the Tebrau coast.
Combined with the Danga Bay development which is located at the western side of the southern tip of JB, he has over 1,619ha that will be developed into an waterfront city fronting Singapore over several years.
The land is parked under Iskandar Waterfront Holdings Sdn Bhd (IWH), which is the master developer of parts of JB city. He owns 60% of IWH via Credence Resources Sdn Bhd and his partner in this venture is the Johore state government via Kumpulan Prasarana Rakyat Johor (KPRJ), which holds the remaining 40% stake in IWH. Both EPF andKhazanah Nasional Bhd has indirect stake in IWH held via Iskandar Investments Bhd.
IWH’s over 1619ha forms part of Iskandar Malaysia’s 221,707ha and Iskandar is being built into a metropolis of the south. With the developments taking shape in Iskandar from theme parks to an edu-city and a water front city, investors are trickling in.
Singapore has shown its willingness to participate in the development but there is a need to really change the CBD into a more vibrant city to attract more investors from across the causeway and other countries. The other developer of plots of land in Iskandar Malaysia is Khazanah.Rejuvenating JB heritage: Cascading Retail @ Bukit Timbalan.
“Fifteen years ago no one wanted to lend me a dollar and people used to a laugh at me when I showed the concept of creating JB into a waterfront city like Hong Kong-Shenzhen. They thought I was crazy. But now, they are same ones telling me that JB is going to be another Hong Kong-Shenzhen and I am not even talking,” he tells StarBizWeek in an interview.
This week he sealed his biggest deal yet. He sold 55 acres to one of China’s biggest property developers, Country Garden Holdings Ltd, for nearly RM1bil and he says a lot more deals are in the pipeline including selling of an island made of reclaimed to an influential Singapore company. And all of IWH’s land is sold on a joint venture basis except the 55 acres to Country Garden.
CBD the heritage city
Abandoned and half closed shops are a common sight at the CBD and it has become an eyesore. Some are also infested by the squatters. Some owners of the buildings and shops have migrated and to track them down has been a big challenge for Lim. He managed to trace and has bought some 50 plots in various locations, the latest being a plot of 133ha at Jalan Wong Ah Fook from an old man who had migrated and was the seventh generation owner.
This is part of the makeover process and is necessary if JB is to be turned into a waterfront city.
“You cannot be attracting investors to JB and still have squatters in the city. We need a vibrant city that has all the ingredients of a modern and world class city to be able to attract the investors,” he says, adding that when he buys over a plot that has squatters, he has to compensate and relocate them.
“We want to beautify the city, clean up the sea bed and sewerage, improve the landscape and traffic flow. There will also be a city tram and this new CDB will be themed as a heritage city,” he says. The makeover of the city is the state government’s project and IWH has mandated to see it through.
The city will be divided up into sections where there will be food and beverage areas, China town, Little India, a Malay street, and night-life attractions.
“We are doing all this for the people in the state and that will create economic activity and at the same time we want to attract some of the Johoreans who have migrated to return and participate in the economic activity in their state.
“We will also put up a city college, a medical related college, service apartments, budget hotels, convert old heritage buildings into boutique hotels and also do up the streets. Jalan Wong Ah Fook will be turned into a pedestrian street and phase one which includes the redevelopment of Jalan Wong Ah Fook should be ready by mid- or end-2014,” he says.
Work on beautification will begin in the first quarter of 2013 and the Johor state government will dish out tenders for the beautification of the CBD. It will also get involved in the cleaning and reclaiming of Sungai Segget, right now has the indignation of being labelled one of the smelliest rivers.
To develop the area into a CBD, he says options will be given to the existing land and shop owners to follow designs that have been approved and keep their shops open.
“We can work out joint ventures with them or they can sell it to us or develop themselves. Our approach is very friendly. What we want is to create economic activity and attract tourists and Malaysians into JB,” he adds.
For the beautification of the CBD the state government will invest RM200mil and an additional RM200mil will be invested by the Federal Government for the cleaning of Sungai Segget and putting up a new sewerage treatment plant.
The east-west side
The next thing on his plate after developing certain plots of land in Danga Bay is the Tebrau Coast. Danga Bay will be developed into a premier waterfront destination with features such as a cruise ship terminal, marina, fisherman’s wharf and tower blocks to house commercial offices, hotels, exhibition and convention centres, and residential properties.
“We were asked to do a master plan for the eastern corridor and now we have obtained the approvals. It is only right to now tackle the east side after we have developed some parts of the west side (Danga Bay) and are also going to begin works on the CBD,” he says.
Tebrau Coast will replicate the Gold Coast model where there will be high rise buildings comprising apartments, hotels, commercial buildings and also retail outlets.Living with heritage: Artist impression of Boutique Hotel @ Bukit Timbalan
“We will be working with the Australian Walker Group on this over a 81ha site. The lifestyle product in Gold Coast is selling like hot cakes and we want the same concept here.
“We also have a joint venture with DiJaya Corp to develop the land over 81ha there,” he adds. All these developments will be built over 15 years.
There are several rivers in the Tebrau Coast that will need to be cleaned and land reclaimed. They include Sungai Plentong, Sungai Lunchoo, Sungai Reko and Sungai Tebrau.
Lim is known to have the expertise to reclaim land and as a result of that he has managed to grow the landbank of IWH to over 1619ha. But that acerage also includes the land that IWH has got after taking control of Tebrau Teguh Bhd.
With him buying more plots of land and with the reclamation work underway, it will be no surprise if IWH’s acerage increases to over 2023ha.
“Half of our land in Danga Bay has been reclaimed. It used to be a swamp area and that is why the cost is high. We have reclaimed 324ha of land. We have a proven track record of reclaiming land and now we are going to do the same at the Tebrau coast. We are starting all over again,” he says.
Of the 1619ha, half of it is at Danga Bay. The Tebrau coast comprise 405ha of which 162ha has been sold thus far.
Some of the ongoing projects at the 1619ha owned by IWH include the RM500mil Azea Residences by a Singapore group, the RM105mil Plazzo Hotel & Serviced Suites by Waz Lian Group, RM20mil Tune Hotel project, Dijaya Corp Bhd is investing to build a high-end mixed development project that will have a gross development value (GDV) of about RM5bil. Burnsfield is building retail and commercial buildings that will have a GDV of about RM4bil. The Country Garden project will have a GDV of RM18bil.
Avoiding the glut
The deal with Country Garden took four months to conclude but some others are taking their time because some companies have longer evaluation and approval process than others. He is in talks with several parties, some of them are GLCs and that requires government approval.
But what he is excited about is the sale of a man-made island in the east side to a Singapore party. There are other investors from Singapore who are interested in the fisherman’s wharf, which is one of the 10 projects in Danga Bay.
“They (the influential Singapore party) are haggling for a lower price,” he says.
But there are other Singapore parties looking at different parcels and even Country Gardens wants to buy more land in Danga Bay.
“The Indonesians are looking to buy some land to create lifestyle projects,” he adds.
While he wants a variety of investors, he is also vary that if they cannot sell their high rise commercial buildings, apartments or commercial units, it would create another glut and that is something he wants to avoid.
Having learnt the experience of the 1997 crisis, he says land will only be sold in stages so that there are takers for whatever is being developed. “We have to ensure each developer has product differentiation so that demand for their products will always be there and this prevents a glut,” he says.
When he started out, Lim bought land for RM1.50 psf to RM3 psf. Now the same land is being sold at RM300 psf to RM500 psf depending on location. He can’t say how much more the land will appreciate given the total development at Iskandar Malaysia, which comprise of over 221,707ha.
“I can’t say how much more it will go up or what is the valuations are now because we have not valued the land but we have commissioned someone to do it recently,” he says.
He adds that “for now we are still selling at early bird prices but eventually we would have to tender the land and sell it to the highest bidder.”
“What we are creating is an international waterfront city. The buildings will all be high rise as just to clean up the rivers and reclaim the land we have to buy sand from Pengerang and that costs us a lot of money, hence our land is expansive.
“There is no way we can do landed property or terrace houses on such a land because the cost will be too expensive and nobody will buy a terrace or semi-D for RM10mil. That is why we are modelling our land on Hongkong-Shenzhen and this development will take years because waterfront cities are not built in a day. They can take decades for full realisation,” he says.
Lim also wants to work with developers from different countries, say China, India, Europe, Australia, Indonesia and Singapore so that when there is a problem in their home country, not every developer is affected and the overall development can go on.
In the past, we touched briefly on the plan of corporate play by IWH moving into Tebrau Teguh Bhd. Also ABITW’s ‘East-West’ development plan of Greater Johor Bahru. Now, Lim has put all that on the same page. Its part of his 4,000 acres grand plan, ready for IPO sometime next year.
IWH has brought in the investors. The Garden City project alone is expected to have a GDV value of RM 18 billion.
Johor Bahru’s growth is being planned and spurred with the Iskandar Malaysia grand development, a perfect demonstration of total economic development plan between the Federal Government, Johor State Government, Khazanah Holdings Bhd and public and private corporations, as part of the Government-Private partnership introduced as part of the Prime Minister Dato’ Sri Mohd. Najib Tun Razak’s Economic Transformation Plan (ETP).
Prime Minister Najib is very pleased, supportive and bullish of these plans.
Iskandar attracts major China developerJOHOR BARU: The real estate sector in Iskandar Malaysia received another boost yesterday when one of the top ten property developers in China pumped in RM900 million to build a prime waterfront integrated development project in the growth region.
Prime Minister Datuk Seri Najib Razak described the entry by Country Garden Holdings Co Ltd as a vote of confidence in Iskandar Malaysia.
He linked the interest by the Chinese developer to the transformation of the central business district (CBD) here into a heritage city.
“Such a transformation will attract more local and foreign companies to venture into the property market in Iskandar Malaysia.
“Country Garden is one of them. The company was listed as one of the 50 biggest companies in Asia by Forbes last year.
“This investment is the first in Iskandar Malaysia by a group from mainland China. I understand other major developers from around the region are looking closely at the southern corridor as an attractive destination for capital.”
Najib was speaking before the signing ceremony of sales and purchase agreement for land in Danga Bay between Country Garden Properties (M) Sdn Bhd and Iskandar Waterfront Holdings Sdn Bhd (IWH).
Country Garden was represented by its founder Yeung Kwok Keung, and IWH by its chairman Datuk Dr Shahir Nasir.
Present were China’s Ambassador to Malaysia Datuk Chai Xi and IWH executive vice-chairman Tan Sri Lim Kang Hoo.
Najib said the project was the latest that showed Iskandar Malaysia was taking off in a big way to attract major foreign property players.
“Following positive international media coverage of its green city ambitions, this exciting development is further proof that Iskandar Malaysia is now recognised as one of Malaysia’s key growth engines.
“Since its launch in 2008, we have seen companies of all sizes invest in residential, commercial and industrial developments, and oil, gas and manufacturing sectors.
“The pace of development has not let up. This year, Iskandar Malaysia is poised to breach the RM100 billion investment target, attracting RM99.79 billion in investments up to the third quarter, which represents a significant contribution to the Malaysia’s economic vitality and growth,” he said.
In a press conference later, Chai said the entry by Country Garden would be an impetus for other Chinese developers to invest in Iskandar Malaysia.
He said the good infrastructure and potential in the growth region were attractive enough for Chinese investors.
Prime Minister Datuk Seri Najib Razak (centre), accompanied by Johor Menteri Besar Datuk Abdul Ghani Othman (left), witnessing the exchange of a MoU between Iskandar Waterfront Holdings Sdn Bhd chairman Datuk Dr Shahir Nasir and Country Garden Holdings Co Ltd founder Yeung Kwok Keung at the Danga Bay Convention Centre in Johor yesterday. Pic by Roslan Khamis
Lim brought much welcomed investment into Iskandar Waterfront project. It would be the catalyst of other FDIs targeted to achieve Iskandar Malaysia’s strategic plan economic and physical growth.
Earlier in the year, Prime Minister Najib provided facilitation funds for Danga Bay as a demonstration of Federal Government’s commitment to ensure the success of Lim’s brilliant property development plan
Najib Announces RM200 Million Facilitation Fund For Danga Waterfront Project
JOHOR BAHARU — The Danga Waterfront Development project receives a massive shot in the arm from the government when the Cabinet agrees to provide it with a RM200 million facilitation fund.
Prime Minister Datuk Seri Najib Tun Razak said the decision to provide the fund underscored the federal government’s commitment towards the project.
“The Iskandar Integrated Waterfront City of which Danga Bay is the jewel in the crown, is one of the most exciting areas of development in Malaysia and most certainly in Johor,” he said at Danga Bay’s 15th anniversary celebrations and launch of Yayasan Danga here attended by Sultan Ibrahim ibni Almarhum Sultan Iskandar.
The prime minister said the project’s easy accessibility via air, sea and road and its unique position at the edge of the Peninsula bordering Singapore, were major plus points as a lifestyle destination and in attracting investors.
The Danga Waterfront project, stretches 25km from the eastern to the western sides of the Johor Causeway, will see a complete makeover of Johor Baharu and the entire sea-fronting sites facing Singapore.
The development, to be launched in phases over 25 years with a gross development value of RM80 billion, will be a public-private partnership involving the government and Iskandar Waterfront Holdings Sdn Bhd (IWH).
Najib said this impressive effort at urban redevelopment was in line with the corridor development approach by the federal government to revitalise and reinvigorate old towns with a new lease of life.
“In the case of the Iskandar Waterfront City development, I am pleased to note that exciting new features are being planned for the city, such as a cruise ship terminal, marina, fisherman’s wharf, as well as tower blocks to house financial and commercial offices,” he said.
According to the prime minister, Danga Bay’s true potential was now on the verge of being realised with the unveiling of the Iskandar Waterfront City development blueprint.
“The size and scope of this project is not only massive but also impressive.
“When completed, it will help propel Johor Baharu to become amongst the most visionary and modern waterfront city not only in Malaysia, but in the region,” he said.
IWH, the driver of this development, he said, would have the support of the federal and Johor state governments to spearhead initiatives to transform Johor Baharu into a world-class business, commercial and tourist destination.
He said catalytic projects like the Danga Waterfront Development project would help shape Malaysia’s transformation into the new economy as envisaged by the government.
The prime minister also announced that Datuk Lim Kang Hoo as IWH managing director had committed RM50 milion for Yayasan Danga to carry out its Corporate Social Responsibility (CSR) projects.
Earlier, Johor Menteri Besar Datuk Abdul Ghani Othman said the government had also allocated a facilitation fund of RM200 million for the Sungai Segget clean-up project in Johor Baharu city.
Present at the ceremony were the Johor Sultan’s consort Raja Zarith Sofia, Tunku Mahkota Tunku Ismail ibni Sultan Ibrahim, Tunku Temenggong Tunku Idris ibni Sultan Ibrahim and Najib’s wife Datin Seri Rosmah Mansor.
Iskandar Malaysia coupled with the RM 60 billion Petronas RAPID new petrochemical hub in Penggerang, Johor is the beneficiary of 49% of Prime Minister Najib’s ETP. The end game all of these will be realised with the synergy of the high value Singaporean economy.
Needless to day, Greater Johor Bahru is bullish on its transformation plan and process. Businesses will be generated, physical development spurred, value created, jobs created and potential steeper growth in GDP. Local economy and demand for retail and services would naturally piggy-back on this rich-flavoured gravy train.
Johor would have to make plans for larger migration from the rest of Malaysia. Of course, other a new international immigrant communities, particularly from across the Johor Causeway and now China. Too many, this makes a lot of sense as Johor Bahru is a more affordable city to live and during the Iskandar Development Region, free and seamless access to common border was planned.
Johor Bahru would be the Dubaii of Souh East Asia. The physical landscape, measured in quantitative and qualitative aspects of Johor Bahru would change by the time Malaysia arrive to the Vision 2020 deadline.
And as the leading corporate player in the biggest property play, Lim is the man to watch.