China firm buys Danga Bay land for $232m
SHRUGGING off concerns of a softer property market and looming oversupply, China's Greenland Group on Wednesday inked an agreement with Iskandar Waterfront Holdings (IWH) to acquire 5.6ha of land in Danga Bay for RM600 million (S$232 million), or nearly RM987 per sq ft.
The state-owned developer will commence work on its maiden Malaysia venture in a 90:10 equity partnership with IWH by the end of the year, with completion expected within five years.
Located near the Johor city centre, the development has an estimated gross development value of RM2.2 billion.
The Fortune Global 500 company, which was on a fact-finding mission to Iskandar Malaysia in late February, is looking at two or three additional land acquisitions.
This confirms media reports last month that it is prepared to invest some US$3.3 billion in a resort and residential developments in the economic zone.
In the wake of China-Malaysia friction over the loss of Malaysia Airlines Flight MH370 - nearly half the passengers were Chinese - there has been a marked reduction in tourist arrivals from China. Malaysian officials, however, say bilateral trade and business remain unaffected.
Greenland is the latest in a list of Chinese developers, including Country Garden Holdings and Guangzhou R&F, to make a beeline for Iskandar following a softening of their home market.
The Chinese appear prepared to ignore a slowdown in the current market.
In a media statement released out of Shanghai yesterday, Greenland's group chairman said: "We believe this investment, by virtue of its strategic location and proximity to Singapore, will offer good returns."
On its part, IWH - the master planner of some 1,600ha in Iskandar - appears to be striking while the iron is hot - albeit at the risk of oversupplying the market.
Realtors say the Johor property market, especially for strata-title units, has softened noticeably owing to cooling measures in the October budget and the doubling of the minimum purchase price for foreigners to RM1 million.