Buffet breakfast, lunch, dinner and supper

It is comforting to watch Iskandar Waterfront Holdings (IWH) making headway in the property business around Greater Johor Bahru as the Super Mega Developer. Investments realised, properties are added value and new businesses come in to take the risk. Of course, the bet is on the rewards later.

Tuesday February 19, 2013

Land and development on man-made Danga Bay island to cost RM8bil

By B. K. SIDHU
bksidhu@thestar.com.my

The total cost of the land and the integrated development was likely to cost RM8bil. A joint venture has been formed for this deal between CapitaLand Malaysia, IWSB and Temasek, with the Singaporeans taking the bigger share.
The total cost of the land and the integrated development was likely to cost RM8bil. A joint venture has been formed for this deal between CapitaLand Malaysia, IWSB and Temasek, with the Singaporeans taking the bigger share.

PETALING JAYA: Singapore’s Temasek Holdings Pte Ltd and its unitCapitaLand Malaysia Pte Ltd will enter into an agreement with Iskandar Waterfront Holdings Bhd (IWH) today to buy a man-made island measuring about 28.33ha at Danga Bay for about RM800mil.

Those in the know said that IWH unit Iskandar Waterfront Sdn Bhd (IWSB) would also be party to the acquisition, and the three parties would jointly develop the 28.33ha into a mixed integrated development, comprising high-rise buildings and landed homes complete with a shopping mall and food and beverage outlets, to be completed over the next few years.

The total cost of the land and the integrated development was likely to cost RM8bil, they said.

A joint venture has been formed for this deal between CapitaLand Malaysia, IWSB and Temasek, with the Singaporeans taking the bigger share.

This is the second largest tract of land that is being sold by IWH in less than two months after China’s Country Garden bought 22.26ha for RM900mil in December.

In total, IWH would have sold about 242.81ha thus far. It is the master developer of a waterfront city at the southern tip of Johor Baru fronting Singapore. IWH has a total land-bank of about 1,618.74ha in that area.

This deal with Temasek/CapitaLand signifies the entry of a big Singaporean investor that sees potential in Iskandar Malaysia, the southern economic corridor of Malaysia, and could signal the entry of more Singaporean investors into Iskandar Malaysia.

In fact, the premiers of both countries will be witnessing this deal today and also a ground-breaking ceremony for a wellness centre that is being jointly developed by Khazanah Nasional Bhd and Temasek.

Khazanah and Temasek are the investment arms of Malaysia and Singapore, respectively. CapitaLand Malaysia is a wholly owned subsidiary of CapitaLand Ltd, one of Asia’s largest real estate companies. Temasek has a 40% stake in it.

Khazanah and Temasek, via their joint-venture vehicle Pulai Indah Ventures Sdn Bhd, are developing the “urban wellness” project on a 2.02ha site in Medini North and the 84.98ha “Resort Wellness” development in Medini Central. The whole development has a gross development value (GDV) of RM5.2bil.

Both the projects, the man-made island and the wellness centre, will have a combined GDV of over RM16bil and these development will be spread over a few years, catalysing construction and other business activities in the state in the process.

Those in the know claim that the negotiations for the sale of the man-made island, also known as the A2 island, took almost two years to complete, as both parties were haggling over the price. It is man-made because it is a result of reclaimed land.

IWSB is the master developer of over 1,699.68ha at the southern tip of Johor Baru. Of this, 809.37ha make up Danga Bay, a development of 10 flagship projects, including a marina. The other parcels of land owned by IWSB are within the Johor Baru city centre, Tebrau Coast, and also 121.41ha in Desaru.

Apart from today’s land sale and that to Country Garden, IWH has sold 81.75ha to Australia’s Walter Group, 99.15ha to Dijaya Corp and about 10.12ha to the Brunsfield group.

The Johor government, via Kumpulan Prasarana Rakyat Johor, has a 40% stake in IWH, with influential businessman Tan Sri Lim Kang Hooholding the remaining 60% via Credence Resources Sdn Bhd.

*******************

Kudos for Tan Sri Lim Kang Hoo, contractor-turned-master developer who controls Credence Resources Sdn. Bhd. (CRSB). He has been coming into the forefront and ever so often lately, when it comes to mega deals involving prime or prized properties around Greater Johor Bahru. Particularly, within the city limits and selected parcels within Iskandar Malaysia.

Lim as a corporate and property player even inadvertently spelled out the strategic plan when he outlined mega projects that would transform Greater Johor Bahru. An announcement best done from an authority higher up.

It is without doubt Lim took a lot of risk making investments and pulling up resources to be a strategic property wholesaler and later dissect the repackaged parcels for different parties dare to the take the risk and challenge.

Then again, there would a lot of issues arising from going too big, too fast. Inorganic meteoric growth often comes with a lot of speculations. Be it at the political, strategic planner, implementer, capital and financial market  players and punters or ordinary everyday persons on the street. Different stakeholders have different concerns,

The politically savvy people would speculate on the political backing Lim is enjoying. Of course the more prudent lot would look at the political opportunity costs arising from political personalities often being mentioned as providing necessary endorsements, especially in the interest of taking Johor and the Malaysian economy into the ‘transformed level’.

No less that Prime Minister Dato’ Seri Mohd. Najib Tun Razak himself are bullish about Johor, particularly the lower quarter being the serious propulsion in his economic transformation plan (ETP). Almost 50% of his ETP programs are located in and around Greater Johor Bahru. The better half of projects which are getting Federal Government injection  if not support, is banked on the notion about Johor benefitting from the growth and spill over effect from the high value Singaporean economy.

Then there are the pessimists, who would look at ‘over exposures’. Capital and financial market payers and punters often are cautious when too many eggs being placed into one basket. Of course, these self-profess advocates of market-driven-economy are never convinced and in many ways contradict their ownselves with entrepreneur like Lim is taking the charge instead of the GLCs.

The perfect example is Al Bukhary Group. They have proven to value ad and increased not on the ROIs of businesses that they privatize or took over, but also increased the productivity.

Their arguments have some validity. GLCs now behave like ordinary enterprise, where they are fully responsible of their own profitability, liquidity and ability to service their own commitments. These GLCs are subjected to the same practice like any other PLCs and corporate governance and integrity is paramount. After all, on top of being a progressive and productive enterprise GLCs also required to do serve the ‘national agenda’.

So for GLCs to take a lead charge in super mega property development projects in Greater Johor Bahru make a lot of business sense. However, that is not the case. Even though Johor State Government control one of the GLCs, which has several PLCs in its stable.

The strategic planners should be if not already is baffled, why an entrepreneur via his enterprise is taking centre stage in the ‘transformation agenda’ of Greater Johor Bahru. It is almost like Ramly Burger outlining the ‘bigger picture’ for the beef industry, especially in the disflavour of beef contamination feverish fit in the United Kingdom.

The implementers should also be  confuse, if they are not already are. Super mega property development projects and the downlines require all sorts of approval at so many stages. These approvals cut across from design, communal planning, traffic, waste and utilities management and of course, environmental issues. This man made island definitely requires special attention even though Lim is said to have ‘cleanse’ once inhabitable Sg. Danga.

Some may argue that this parcel sold to the investment arm of Singapore Government isn’t actually ‘natural’ land and nothing is taken away from Johor, be it the state or people. But then again skeptics are confident this would be the ‘door opener’ for more Johor parcels being hived off for the benefits of Singaporean investors, particularly Temasek. This would aggregate the sensitivity that property prices in Greater Johor Bahru is already sky rocketing due to the ‘push factor’ from the more power purchasing power from across the Johor Straits.

Adding injuries to insults, the strong rumour around Johor folks about the contractor for the PR1MA affordable project in Johor Bahru is non other than the contractor-turned-mega developer himself.

Lim as an individual and corporate player has been the if not part of topic of many social or serious conversations either by Johoreans be it within Johor or elsewhere or when others talk about Johor. Grandstanding would not help the perception which would could easily be twisted into something ugly even though none of it was ever substantiated.

People tend to over simplify things with the tinge of controversy, if not scandal, to make it tangy. They never discuss how and what it takes to prepare a feast-like meal, such as a buffet spread. However, the connotation of the buffet could easily be presented to depict gluttony on the eater’s end. Again, it is all about perception and manipulation of facts and circumstances.

Then again, Malaysians are known to make the wrong decisions based on perception.

Probably they have conveniently forgotten how Johoreans decided on a record breaking ‘spoilt votes’ during 12GE, after the summary cancellation of Scenic-Bridge-Over-Johor-Strait in March 2006 and November 2006 launch of the Iskandar Development Region. They also should be reminded that Johor Bahru folks voted for Shahrir Abdul Samad as ‘Key Candidate’ in 1988.

*To be continued

Published in: on February 19, 2013 at 18:01  Comments (27)  

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27 CommentsLeave a comment

  1. What about the high-speed train link between KL and Singapore by 2020 that PM Najib and PM Lee just announced today?

    90 minutes travel time between KL and Singapore “door-to-door”?

    Looks like bad times are coming for the express buses on the KL-Singapore run, to say nothing of the airlines (MAS, AirAsia and Firefly).

    And more sky-rocketing property values in Johor adjacent to the high-speed rail corridor.

    Truly, the times – they are a-changing…..

    • Thank you for your skepticsm.

      Yes, times are changing. Doesn’t mean that everyone will go-with-the-flow, at what ever cost that these new products are being served. Consumers ar selective on cost-benefit effect, though time is money to some really dynamic persons. Never the less, there will still be takers for lesser end products and services.

      High speed trains would not be too cheap for consumers. It is targeted for certain market of travelers but the masses would prefer other means.

      Don’t worry. They will be a large market for intercity coaches, Malaysia Airlines, Firefly and even regular KTM services between Kuala Lumpur-Johor Bahru-Singapore.

      Not everyone take the Eurotunnel service. And that is a fact

      • It’s possible, yes.

        But the business community and the well-heeled middle class and upper middle class in the Klang Valley and Singapore would happily click into a lifestyle where the shops and other attractions of Singapore are a 90-minutes train ride away from downtown KL.

        Don’t forget PM Lee’s comment that it was PM Najib “who first mooted the idea (of a high-speed rail link between KL and Singapore) when the two leaders met at an overseas meeting a few months ago” (Singapore Business Times, Feb 20, 2013).

        And PM Najib was quoted in the same report as saying: “We will draw from each other’s experience. Singapore has many years experience running its MRT. We can look at models in other countries like UK-France, Madrid-Barcelona and cities in China that are connected by high-speed rail.”

  2. Nearing the general election and Abdullah Badawi and KJ dream of selling to Singapore is realising itself.

  3. Johor sedang diCINAkan. Proses berlaku, semua peringkat.

    DAP berhajat dgn Johor.

    Kang Hoo menjamah Johor.

    Singapore pun dah sedia utk melapah Johor.

    PM kena ingat. Nenda dan Bonda dia anak Johor. Sepupu dia tu 100% darah Johor.

    Amokh pun separa Johor.

    Jangan lepas ni, Johor tinggal Zapin, Ghazal & baju Melayu tulang belut ja dah la…..

  4. So it is true that Iskandar Malaysia is expansion of Singapore after all. Slowly but sure, Malays in Johor Bahru will have to migrate to Kulai or Sedenak.

    • Surely, the question to ask is how a tiny city-state has the wherewithal to make all these investments, not only in Johor, but in other places as well?

      After all, Capitaland is not exactly a dubious “fly by night” company, is it?

      If Singapore views Iskandar Malaysia as part of it’s hinterland, is that a bad thing? Like how Mexico regards the US as it’s hinterland?

      Surely, seeing as how this is 2013 and some 50+ years after Merdeka, the Malays in JB and Johor should have enough education, skills and resources to compete with the best out there?

  5. Apa yang nak dibanggakan. Di mana Agenda Melayu? Hancus.

  6. The govt hasn’t explained how and who will benefit from the mega investments in Iskandar devt and Danga Bay project and whether the very setia to BN vots will even afford the services

    • Continuation frm above – and whether the very setia to BN voters in Johor will afford the goods and services from the mega investments. Will more foreign cheap workers be imported by the millions to work in these projects and will the presence of these ppl upset the socio economic lifes of the Johor people? Plenty of unanswered questions. What we hear are billions of ringgit of investments are pouring into Johor. So what? What does it mean for the locals and Johor folks i.e the normal folks not in the category of rich business groups and the category of those who walk in the corridor of power? Wake up, wake up, wake up BN govt and do some stratrgic moves before the locals lose everything. You want to be such capitalistic neoliberalists? Why at the expense of the ordinary locals who have helped put you all in power in the first place?

      • But where are the good, well-paying and high-skills jobs coming from, then?

        Are you saying that Malaysians should be content to remain as “hewers of wood and drawers of water” or as lowly-paid skivvies in SMEs and MNCs? Or to cross the Causeway and earn Singapore $, doing jobs that Singaporeans don’t want to do?

        With all the countries in the region competing for investments (and jobs), Malaysia doesn’t want to be, as the Johor MB said, “left out”.

        Welcome to the brave new world where sovereignty doesn’t pay the bills and put food on the table for the lower-income and aspiring middle-class groups!

      • Yeah right. The internationalisation of Johor ensures the inflow of foreign experts to fill up posts created by multinational companies and foreign money. And what make you think the locals will be the ones occupying the well paid top posts when the decision makers of companies and projects are the ones who brought in the billion dollar investments from abroad. Who calls the shot? They call the shots. That is the essence of economic neoliberalism, where the locals have nothing but have to sacrifice everything. If sovereignty is nothing to you, then go and find somewhere in this world where soverrignty is treated as nothing. Chances are that you will not find that place. The more global some people want the world to be, the more countries are putting barriers at their doors. Only Malaysia is too darn myopic to see the downside of exposing itself too much to the vagaries of world market capitalism. Go study economic neoliberalism and the damage it has caused, then we can discuss.

      • Postgrad

        You spin a good academic thesis.

        But what are the alternatives?

        What is the future for Malaysian SMEs if they have a fixation for using cheap foreign labour? How do they improve productivity and climb up the skills ladder?

        Are the Singapore SMEs investing in Iskandar Malaysia going to produce a “Maquilodora zone” in Johor servicing the SME’s and MNC’s regional hqs and R&D set-ups in Singapore?

        Who will provide the good and well-jobs that the graduates churned out by Malaysia’s public and private universities, and those returning from studying overseas, expect as they aspire to middle-income and upper middle-income status? GLCs? Or will the Malaysian government be forced to become the “employer of last resort”?

        “Economic liberalism” may be a catchy phrase. So, too, are “capitalism” and a “free market economy”.

        It is evident that you are no fan of P Chidambaram!

      • I dont spin academic thesis. The downside of economic neoliberalism has been well researched and documented. The Occupy Wall Street movement is one example of the protest against market capitalism.

        The internationalisation of Johor puts it at the mercy of the vagaries of global market capitalism. It is premature to conclude that mega investments will automatically provide top jobs for locals. Multinational investors like to put their own experts who may not be locals. These MNCs also enjoy tax cuts and other incentives given by Malaysia and they repatriate profits back to their HQs abroad. If they can’t find ppl to work at the lower end of the line they’d high cheap foreign workers.

        Mind you the SMEs will prove to be the solid Malaysia owned enterprises that will continue to provide jobs for the locals who do not fall under the category of professionals and executives. The MNCs are not the panacea for job solutions for graduates and highly skilled ones.
        Is there any indication that they will? Look at the kind of projects in Danga Bay. The long term requirement will be for workers required for the service sectors. Nothing so skilfull and high income abt it. Rather more cheap foreign workers will be brought in. Likewise the real estate sector. Developers will benefit. Know what? Ordinary locals dont have the capital for the mega projects in Johor, hence they’d largely be bystanders. The question is – how would they benefit? Jobwise, yes but what type of jobs? No one has made any projection of what types of jobs these foreign financed projecs and MNCs provide for Malaysians and Johoreans specifically.

      • Correction – ‘ they’d hire cheap foreign workers..’

      • Indonesia and Thailand didnt put stoppers on their doors to solve the financial crisis because they were bailed out by the IMF and had no choice but to bow to the stringent measures drawn by the IMF. Do you what those countries went thru at that time. The same situation has inflicted many countries in Europe now.

        And you asked if the technocrats and bankers could manage global capitalism. My question to you. Can they when it comes to the crunch. At whose expense. Malaysia’s economy is controlled by the economic neoliberalists as opposed to the Keynesian type. And when criticisms are being made abt economic neoliberalists, who is talking abt free lunch? Tell me who are getting tax holidays and investment incentives? Locals dont get free lunch. They work hard to make ends meet l.

        Go study about economic neoliberalism . Then we can discuss. The protests by Singaporeans against their govt over influx of foreign workers and experts and how they hve to compete for jobs with foreigners in their own country is an example of the downside of economic neoliberalism.

      • Correction – 9.45pm today.

      • Postgrad

        At the time of the financial crisis, Indonesia and Thailand were run by sovereign governments.

        They certainly didn’t have to turn to the IMF for bailouts. Yet they did? Now, why do you suppose that was?

        Surely the economists and central bankers in Indonesia and Thailand then weren’t incompetent fools, were they?

        They opted for economic orthodoxy and biting the bullet, while Dr Mahathir went his maverick way (including, let it be said, seeking a loan from Singapore).

        Fast forward to the present. Are Indonesia and Thailand worse off than Malaysia. Did they suffer irreparable damage by going the IMF route?

        If anything, Indonesia and Thailand showed that there are benefits from adopting economic orthodoxy (although the populist economics of Thaksin Shinawatra was a costly aberration for Thailand).

        Which is also why Indonesia has kept it’s budget deficit at less than 3 per cent of GDP.

        Perhaps having a “Berkeley Mafia” as economic advisers isn’t such a bad thing after all!

      • Postgrad

        It’s strange that you have so cavalierly dismissed the capabilities of Malaysia’s technocrats and central bankers in their ability to navigate the waters of “economic neoliberalism”!

        Are you suggesting that these experts are not on par with their counterparts in Indonesia, Singapore and Thailand?

        As far as Singapore is concerned, they seem to be doing a good job, seeing as how they are projecting a budget surplus for FY2012. Their triple-A rating seems to be safe, even as Britain’s rating got downgraded by a notch.

    • No it is not ‘economic liberalism’ and it is not a catchy phrase either. It is economic neoliberalism and it has been empirically tested and well documented. If Malaysians want to open itself to global market capitalism and yet have no knowledge abt economic neoliberalism, then I feel sorry for them. Malaysia was hit by the downside of economic neoliberalism in 1997-1998 called the financial crisis caused by the unfettered finacial flows. Malaysia put a stopper at its door through financial control and other measures. Dah lupa dah?

      • “Malaysia put a stopper at its door…..”

        Yes, but at what cost?

        Why should the Singapore Dollar be worth 2.50 Malaysian Rinngit? Is the Singapore fiscal situation and economy significantly stronger than Malaysia’s?

        Other countries, like Indonesia and Thailand, who were hit by the same financial crisis, did not put “stoppers” at their doors? Did their economies come a cropper and were they reduced to indigent basket cases? Far from it, as their trade, fiscal and GDP growth figures show.

        Are you suggesting that Malaysia’s technocrats and central bankers do not know how to handle “global market capitalism” and make it work for the country’s benefit? That will be news to the PM, who is a trained economist!

        What, exactly, is “economic neoliberalism”, and why is it disadvantageous to Malaysia?

        Since we are on the subject of “catchy phrases”, let me reiterate that “there’s no such thing as a free lunch”.

      • Correction: it should be “Malaysian Ringgit”.

      • Gooberman, see my response above as per the post at 9.45am today. And do study abt economic neoliberalism and then we can discuss.

      • Not playing referee here, but Postgrad writes about the most basic ideas about neoliberalism and its dangers. Perhaps some other people does not understand post-Keynesian economics.

        For the uninitiated, I can say it is an extreme form of economics where allocation of resoures (clearing via Supply/Demand curve) is strictly and purely dictated by the market, without regulation, control, no social barrier, no human face at all.

        If this is so hard to understand, imagine if the financial markets are liberalised (not in Malaysia alone) but the whole SEA region. All locallly-incorporated banks in the region will close shop because Citibank alone can service the entire region.

        Another good example is to follow the costs of making a Nike shoes. You can watch YouTube to know this. How much is paid to the laborers (residing/working in the 3rd world countries) and how much Nike profits.

        Neoliberalism further deepen the gap btw the rich and the poor, and the global statistics show.

        AES sucks because it is borne out of neo-liberalist idea.

        Malaysia can play this neoliberalist game, but I’ll tell me Melayu sure will koyak habis in the future (not that they are mow koyak already).

      • Boateng is being alarmist.

        It appears that he has an irrational fear (or atavistic dislike – take your pick) of capitalism and the free market.

        That may be his opinion, but what are the alternatives? Communism? Socialism? Democratic socialism? Capitalism? Democratic capitalism? Unfettered competition?

        How will this play out in the wider regional and global context, when every country (except, perhaps, Iran and North Korea) are competing to attract investments and talent?

        Can Malaysia afford to “opt out” and sit on the sidelines and hope that Petronas can continue to pony up 30 per cent+ of government revenues?

        It is fashionable, like Boateng and Postgrad have done, to decry “economic neoliberalism”, whatever that means.

        Note, however, that they have been extremely circumspect in prescribing their solutions for the Malaysian economy and polity, given the regional and global contexts I alluded to above.

        And that is downright mischeivous!

      • Oh, come on, Boateng

        Are you even serious in claiming that “Melayu will surely koyak habis in future….”?

        Are you dismissing their ability to stand up and compete in a changing regional and global scenario, or are you testing the waters with possible excuses for an under performing economy in future, or when Asean economic cooperation and integration is kicked up several notches?

        It sounds suspiciously like a cop out to me!

  7. […] Contractor-turned-developer and now Mega Master Developer of Greater Johor Bahru Tan Sri Lim Kang Hoo has been grandstanding. He is now thumping his chest, to make himself notably […]


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