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Greenland Group plans RM10bil projects in Iskandar

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The Greenland Group is the latest developer from China to buy land for a sizeable property project in Johor’s coastal Danga Bay area, reported Starproperty.

The company plans to develop properties worth RM2.2bil in gross development value (GDV) and struck a deal to acquire 13.96 acres from Iskandar Waterfront Holdings Sdn Bhd (IWH) at a cost of RM600mil.

Last December, Hao Yuan Pte Ltd, a Singapore-based but China-owned firm, paid for 37 acres in Danga Bay while now the price works out to RM984 per sq ft – just below the record RM991 per sq ft.

This is Greenland’s maiden investment in Malaysia, for which it will form a joint venture with IWH to develop the land into an integrated project within five years.

The latest to feel the heat was Singapore’s Pacific Star Development Pte Ltd, which saw bookings for only 25% of the second phase of its condominium in Puteri Harbour.

The Shanghai-based Greenland, one of China’s largest state-owned enterprises, is understood to be eyeing a GDV in excess of RM10bil in Danga Bay by the time it wraps up several more transactions in the coming months.

According to industry executives, Greenland is set to finalise “very soon” the purchase of two more land parcels on the eastern corridor of Johor Baru near the Permas Jaya township, where Tropicana Corp Bhd is also a landowner.

However, in the previous news reports, Greenland was keen on acquiring around 60ha in Iskandar Malaysia.

Inclusive of the Greenland transaction, IWH has to-date inked 17 deals with local and foreign partners to develop properties worth RM127bil in GDV, providing a fillip to its ambitious plan of transforming the coastline of Johor bordering Singapore into a waterfront metropolis.

At least four other major China developers were in talks with IWH for mixed-use developments featuring waterfront properties, the company said in a statement.

“This massive influx of foreign direct investment is a boon for Malaysia and Johor because of the economic spillover and thousands of job opportunities that these projects will generate,” IWH managing director Tan Sri Lim Kang Hoo said.

The state-backed group has over the past few years snapped up real estate in major cities such as New York, Los Angeles, Sydney, London and South Korea. A delegation from Greenland had visited Malaysia in February to explore investment opportunities.

Other international property players which have secured a foothold in Danga Bay include Singapore’s Temasek Holdings Pte Ltd and CapitaLand Ltd, Australia’s Walker Group and China’s Country Garden Holdings Ltd and Hao Yuan, while local firms with ongoing developments include Tropicana and the Brunsfield Group.

Recently, Maybank IB Research expressed concern about Iskandar Malaysia’s medium-term prospects, saying the massive incoming supply of residential and retail properties in hotspots like Danga Bay and Nusajaya could be harmful to asset values.

“Judging from the planned launches (serviced apartments, hotels, office and retail spaces) by Country Garden, Hao Yuan, Guangzhou R&F Properties Co Ltd, CapitaLand and Greenland Group, the hotspot areas, ie, Danga Bay and Tanjung Puteri, could be flooded with an enormous supply of high-rise mixed development projects, inducing price volatility,” it said in a client note last week.

V Sivadas, PA International Property Consultants Sdn Bhd executive director said buyers were in “transition mode” due to changes in state policy and foreign ownership.

 

*source from PropertyGuru Malaysia on Jul 1, 2014