Malaysia, Singapore firms in JV in Iskandar Malaysia

KUALA LUMPUR: The Iskandar region will be the centre of attraction tomorrow, with two major events from Malaysian and Singapore companies. This will signify deepening economic relations between the two Asean neighbours.

The Malaysian government’s investment arm, Khazanah Nasional Bhd, and Singapore’s TemasekHoldings (Pte) Ltd will collaborate to develop two wellness projects in the Medini area with a gross development value (GDV) of RM5.2 billion Iskandar Waterfront Holdings Sdn Bhd (IWH), the master developer of parts of Johor Baru city, and its Singapore partner, CapitaLand Ltd, will jointly develop the Danga Bay project, worth between RM4 billion and RM5 billion in GDV.

What is significant is both the prime ministers of Malaysia and Singapore will be present to witness the historic ceremonies.

The visit by Singapore’s Prime Minister, Lee Hsien Loong, to Iskandar Malaysia is the first by a high-ranking official from the city state. This follows the last Malaysia-Singapore leaders’ retreat in January 2012.

Khazanah and Temasek will join hands to develop two wellness projects in Iskandar Malaysia. They are Urban Wellness and Resort Wellness through their 50:50 joint-venture company, Pulau Indah Ventures Sdn Bhd (PIV).

PIV will develop the Urban Wellness project on a five-acre (2ha) site in the north of Medini in Iskandar Malaysia. For the Resort Wellness project, PIV will team up with another Malaysian company, Eastern & Oriental Bhd, to undertake a 210-acre development in central Medini.

These two projects will include a wellness centre, serviced residences, a corporate training centre, commercial and retail shops, and wellness-related products.

Prime Minister Datuk Seri Najib Razak and Lee will perform the groundbreaking ceremony for both the wellness projects.

The tie-up between IWH and CapitaLand involves the latter buying a piece of land from IWH.

Earlier this year, The Edge reported that CapitaLand was looking to acquire 60 acres worth RM1 billion in Danga Bay for a project that will have a GDV of between RM4 billion and RM5 billion.

CapitaLand, which is synonymous with mall development and ownership in Asia, is not new to commercial property development in Malaysia. It tied up with Sime Darby Property Bhd last year to build a RM500 million mall in Kuala Lumpur.

Danga Bay forms part of Iskandar Malaysia’s 221,707ha enclave, attracting RM106.31 billion in investments from 2006 to 2012.  Iskandar Malaysia hopes to draw between RM15 billion and RM21 billion in domestic and foreign investments this year.

IWH is 60%-owned by Tan Sri Lim Kang Hoo via Credence Resources Sdn Bhd. The other major shareholder is the Johor government via Kumpulan Prasarana Rakyat Johor, which holds the remaining 40% stake. The Employees Provident Fund and Khazanah have indirect stakes in IWH via Iskandar Investment Bhd.

These two additional investments from Singapore add to the recent RM3 billion integrated eco-friendly technology park by Ascendas Pte Ltd in a joint venture with local developer UEM Land Bhd. Singapore billionaire Peter Lim will invest RM3 billion in building an Auto City in Nusajaya, with Formula One track facilities, via a joint venture with UEM Land.

Shares in UEM Land and Tebrau Teguh Bhd, 47.16% controlled by IWH, have seen handsome gains in the past few weeks as a result of these economic activities in Iskandar Malaysia.

UEM Land’s share price advanced 11.44% to RM2.24 from Feb 6. Tebrau Teguh has gained 34.04% year to date. The stock jumped from 70.5 sen on Jan 2 to 94.5 sen last Friday.

 

This article first appeared in The Edge Financial Daily, on February 18, 2013.

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