The master planner for Danga Bay said in a statement yesterday that it had signed the sale and purchase agreement with Hao Yuan Investment Pte Ltd for six parcels of land, which would be developed by Pristine Sun Properties Sdn Bhd, a 60:40 joint-venture (JV) between Hao Yuan and IWH.
The price tag of RM1.6bil works out to a land cost of 20 per cent of the RM8bil gross development value, within the range of 15 per cent-20 per cent typically paid to a landowner in Malaysia.
At some RM998 per sq ft (psf), the sale set a new benchmark for commercial land transactions in Johor Baru, besting even the landmark RM4.5bil deal between the Johor Sultan and China’s Guangzhou R&F Properties Co Ltd, which was agreed at RM891 psf.
Hao Yuan has drawn up plans for several high-end residential, commercial and retail properties for its project, including the tallest tower in Peninsular Malaysia and a “landmark tower”.
Hao Yuan’s portfolio in Singapore includes the Forestville Executive Condominiums, Sea Horizon and the Woodlands New Executive Condominium. The little-known firm is believed to be a China-linked company registered in Singapore.
This marks yet another JV for IWH’s Danga Bay land-bank, which is undergoing rapid development as part of Iskandar Malaysia.
A spokesperson for IWH said he could not disclose details on the plot ratio, gross floor area and net saleable area of the project, but property executives estimate a plot ratio of up to 10 times, allowing its owners to extract maximum value from the prized land along Johor’s coastline.
IWH was also expected to ink more property deals in the coming months, as interest picked up in Iskandar Malaysia despite the curbs on speculation announced in recent months, market observers said.
“Danga Bay hasn’t seen much development in the past 20 years. Up to now, it’s mostly been reclamation work,” PA International Property Consultants Sdn Bhd executive director V. Sivadas told StarBiz.
“There are only a few blocks of shoplots currently. It is good to have new and foreign developers entering the market and providing new ideas and products.
“Danga Bay needs to be transformed and developed faster, and this is made possible by new entrants,” he said.
But Sivadas also underscored concerns about the pricing, which he felt would likely exceed what most of the local population could afford.
“Almost every single development here is targeting the high-income group, which in Iskandar Malaysia isn’t large, as well as foreigners. Whether this is sustainable is a question mark.
“A lot of the hype in buying over the past two years is riding on the expectation of the MRT (mass rapid transit) being built, but this is many years down the line,” he said.
Johor Baru-based Sivadas added that he was puzzled by the proposed skyscrapers. “It doesn’t make sense, considering that Danga Bay is a low-density township,” he said.
IWH, which is developing 1,700ha in Danga Bay, Desaru, Tebrau and Johor Baru, has shelved its US$300mil (RM957mil) listing to the final quarter of next year on worries that measures to rein in property prices could crimp demand from foreigners.