“CapitalLand’s Danga Bay deal a steal”
The CapitaLand-led consortium’s acquisition of 28ha of freehold man-made island A2 at Danga Bay has been hailed as an attractive deal by analysts.
The price of RM811 million, which will work out to RM262 psf, is 30 percent lower than the RM376 psf or RM900 million paid by Hong Kong listed Chinese developer Country Garden Holdings two months ago, for a 22ha track located nearby, said Singapore based Maybank Kim Eng Research.
TA Securities’ Wendy Tham said the attractive price could probably be due to consideration given to the additional expenses necessary for development on reclaimed land.
CapitaLand Malaysia, a wholly-owned subsidiary of CapitLand Limited of Singapore, controls 51 percent of the consortium which will develop the land. Other consortium shareholders are Iskandar Waterfront Holdings (IWH) with a 40 percent stake and Singapore government investment arm Temasek Holdings Pte Ltd which has a nine percent stake.
CapitaLand Limited, is one of Asia’s largest real estate companies, involved in development, hospitality and real estate financial services. It is 40 percent owned by Temasek.
The development will include a waterfront residential community (high-rise and landed), with a marina, shopping mall, F&B offerings, serviced residences, offices and recreational facilities, to be developed in phases over 10-12 years. It is expected to generate a gross development value of RM8.1 billion.
Maybank Kim Eng Research said though details for the project are rather sketchy, it believes that CapitaLand would to be able to reap some economies of scale, given that it is the project manager for the Afiniti Urban Wellness project in Medini North, which is within the Nusajaya part of Iskandar Malaysia.
The Afiniti project, part of the Medini Integrated Wellness Capital in Iskandar, is developed by Pulau Indah Ventures Sdn Bhd, a 50:50 joint venture between Temasek Holdings and Khazanah Nasional. Among the key offerings are wellness, hospitality, retail and corporate training facilities. Afiniti and the Avira Resort Wellness Centre, a 50:50 joint venture between Pulau Indah Ventures and Eastern & Oriental Berhad, are said to have a combined gross development value of RM3 billion.
The research house added that despite CapitaLand’s unprecedented investment into Malaysia, it does not expect the real estate giant to scale up its exposure in Malaysia.
IWH, the master developer of a waterfront city at the southern tip of Johor Baru, fronting Singapore, has a total land-bank of about 1,620ha in that area. It has so far sold a total of 242.81 ha. Other investors, include Dijaya Corp Bhd, Australia’s Walker Corp and Brunsfield Group.
Tham agreed with popular belief that investment by a company as large as CapitaLand would further enhance investor confidence in the Iskandar region. Though, some may claim that the Singaporeans have an upper hand in this deal – given the lower price and a controlling stake – this deal is actually a win-win situation for both countries, she added. Investments such as this would draw in more foreign investments into Iskandar.
“Additionally, with this project we can not only expect spill-over effect for other developments in the area but also a positive outcome on property prices in Iskandar, as well as the surrounding areas, including Johor Baru, which has been lagging behind Klang Valley and Penang for the last 10 years,” she said.
Johor Baru and Iskandar have been touted as the country’s hottest property markets for 2013 by analysts and property consultants. Iskandar Malaysia formerly known as Iskandar Development Region and South Johor Economic Region covers 2,217 sq km – reported to be, three times bigger than Singapore and twice the size of Hong Kong.
The area which was once viewed as greenfield land started picking up after 2009 and beyond with developments like Legoland, Educity and Puteri Habour Theme Park.
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The price of RM811 million, which will work out to RM262 psf, is 30 percent lower than the RM376 psf or RM900 million paid by Hong Kong listed Chinese developer Country Garden Holdings two months ago, for a 22ha track located nearby, said Singapore based Maybank Kim Eng Research.
TA Securities’ Wendy Tham said the attractive price could probably be due to consideration given to the additional expenses necessary for development on reclaimed land.
CapitaLand Malaysia, a wholly-owned subsidiary of CapitLand Limited of Singapore, controls 51 percent of the consortium which will develop the land. Other consortium shareholders are Iskandar Waterfront Holdings (IWH) with a 40 percent stake and Singapore government investment arm Temasek Holdings Pte Ltd which has a nine percent stake.
CapitaLand Limited, is one of Asia’s largest real estate companies, involved in development, hospitality and real estate financial services. It is 40 percent owned by Temasek.
The development will include a waterfront residential community (high-rise and landed), with a marina, shopping mall, F&B offerings, serviced residences, offices and recreational facilities, to be developed in phases over 10-12 years. It is expected to generate a gross development value of RM8.1 billion.
Maybank Kim Eng Research said though details for the project are rather sketchy, it believes that CapitaLand would to be able to reap some economies of scale, given that it is the project manager for the Afiniti Urban Wellness project in Medini North, which is within the Nusajaya part of Iskandar Malaysia.
The Afiniti project, part of the Medini Integrated Wellness Capital in Iskandar, is developed by Pulau Indah Ventures Sdn Bhd, a 50:50 joint venture between Temasek Holdings and Khazanah Nasional. Among the key offerings are wellness, hospitality, retail and corporate training facilities. Afiniti and the Avira Resort Wellness Centre, a 50:50 joint venture between Pulau Indah Ventures and Eastern & Oriental Berhad, are said to have a combined gross development value of RM3 billion.
The research house added that despite CapitaLand’s unprecedented investment into Malaysia, it does not expect the real estate giant to scale up its exposure in Malaysia.
IWH, the master developer of a waterfront city at the southern tip of Johor Baru, fronting Singapore, has a total land-bank of about 1,620ha in that area. It has so far sold a total of 242.81 ha. Other investors, include Dijaya Corp Bhd, Australia’s Walker Corp and Brunsfield Group.
Tham agreed with popular belief that investment by a company as large as CapitaLand would further enhance investor confidence in the Iskandar region. Though, some may claim that the Singaporeans have an upper hand in this deal – given the lower price and a controlling stake – this deal is actually a win-win situation for both countries, she added. Investments such as this would draw in more foreign investments into Iskandar.
“Additionally, with this project we can not only expect spill-over effect for other developments in the area but also a positive outcome on property prices in Iskandar, as well as the surrounding areas, including Johor Baru, which has been lagging behind Klang Valley and Penang for the last 10 years,” she said.
Johor Baru and Iskandar have been touted as the country’s hottest property markets for 2013 by analysts and property consultants. Iskandar Malaysia formerly known as Iskandar Development Region and South Johor Economic Region covers 2,217 sq km – reported to be, three times bigger than Singapore and twice the size of Hong Kong.
The area which was once viewed as greenfield land started picking up after 2009 and beyond with developments like Legoland, Educity and Puteri Habour Theme Park.
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