By: WONG WEI-SHEN
Details of RM8bil Danga Bay project being ironed out with JV partners in view of soft property market
PETALING JAYA: Singapore-based CapitaLand Ltd, which is also South-East Asia’s largest real estate developer, is reviewing its RM8bil joint venture (JV) project in Danga Bay, Johor. A senior executive of the group in charge of property development in Malaysia said that the authorities had already given the approvals for the mixed development project.
“We have got the necessary approval from the authorities. We are now reviewing the details of the project with our JV partners,” said CapitaLand Commercial (M) Sdn Bhd managing director Lim Wie Shan in an interview here recently.
CapitaLand Commercial is a wholly-owned unit of CapitaLand Ltd and it manages property projects in Malaysia. The development in Danga Bay, Iskandar Malaysia is slated to be one of the biggest developments of CapitaLand. CapitaLand Malaysia will hold 51% of the JV stake, Iskandar Waterfront Holdings Bhd 40% and Temasek 9%.
The 71.4 acre site will be turned into a waterfront residential community comprising high rise and landed homes, as well as a marina, shopping mall, restaurants, serviced residences, offices and recreational facilities.
CapitaLand is not the only developer to review its strategy due to a subdued property market. UEM Sunrise, which focuses largely in Johor, has also changed its strategy to invest more in the Klang Valley. There are many large-scale property development projects launched by developers from China in Johor.
Despite the slowdown in the property segment, CapitaLand is still looking at increasing its presence in Kuala Lumpur, the Klang Valley and Penang.
“Looking at our track record, we have been in Malaysia for the last 20 years, either through our subsidiaries and joint ventures. We have been through the ups and downs. We are a long-term player and not a fly-by- night developer,” Lim toldStarBiz recently.
CapitaLand’s maiden project in Malaysia was a township development in Johor Baru in the 90s. It later embarked on other projects in KL Sentral, Jalan Pinang, Mont’ Kiara and Bangsar. Lim said Malaysia offered good demographic trends.
“Growing affluence of the population, growing household formation and low unemployment rate – these trends show that the Malaysian real estate market is a viable market that CapitaLand will remain in,” he said.
He added that the group was currently reviewing a few potential projects within Malaysia. Many developers have acknowledged the slowdown in the property sector and are taking measures to ride it out, and CapitaLand is no exception.
“The measures taken by the Government in late 2014 to clamp down on excessive speculation, and the goods and services tax have had the effect of cooling the market. People are watching their spending,” he said.
However, Lim is confident that CapitaLand’s latest project – genKL – will do well based on its location and the product offering. The project is the company’s third joint venture with Juta Asia, and is located in Jalan Kuchai Lama, Kuala Lumpur.
The project, tagged with a gross development value of about RM360mil, comprises 322 apartments of which seven are villas.
“Instead of doing the conventional penthouse, we detached it and brought it down. So you get to stay in a landed house but within a gated guarded condominium with facilities,” says Lim.
The units are priced at RM750 per sq ft.
“Developments along Jalan Klang Lama ae going for RM850 per sq ft.
“We are targeting the middle or middle higher income families. These are true owner-occupiers,” he says.
Lim expected construction for the project to start in October, with completion targeted for the third quarter of 2019.
“For the second half of 2015, we think things for real estate could be slow. We hope that the economy would see a turn hopefully next year and we will then see a recovery.”
