‘Property sector has room for expansion’
By Lam Lin Shi
KUALA LUMPUR: Malaysia’s property market has room for growth, said Country Garden Holdings regional president (Malaysia) Kayson Yuen.
Yuen is seen as the point man for Country Garden’s RM18 billion property venture in Danga Bay, Iskandar Malaysia, in Johor.
Country Garden, China’s seventh largest property developer listed on the Hong Kong Stock Exchange, says the Danga Bay project is its maiden solo development plan outside of China.
The Chinese developer had earlier tested the Malaysian property market, having entered in 2012 via a joint venture with Malaysia Land Properties Sdn Bhd, the country’s largest condominium and service apartment developer.
Wealthy Signet Sdn Bhd, in which Country Garden has a 55 per cent stake, expects to launch high-end township projects in Kajang and Rawang, both in Selangor, by year-end.
The Danga Bay venture though, is Country Garden’s first standalone project in Malaysia, which has a gross development value of RM18 billion.
Late last year, the developer splashed out nearly RM1 billion to buy 11ha in Danga Bay.
The land purchase itself is the biggest investment to date by an investor from China within Flagship “A” of Iskandar Malaysia, said Iskandar Waterfront, the Danga Bay waterfront project’s master developer.
Country Garden, controlled by Yeung Kwok Keung, the patriach of one of China’s richest families, is betting on the combination of
Danga Bay being one of the most sought-after address and Malaysia’s My Second Home programme (MM2H) as the recipe of success.
“Since Malaysia introduced MM2H, many foreigners have decided to stay in the country, which is good news for Danga Bay investors,” said Yuen.
It is estimated that 60 to 70 per cent of house buyers in Iskandar Malaysia are foreigners. This bodes well for Country Garden Danga Bay which hopes to attract foreign buyers.
The Chinese company itself hopes to attract buyers from cities such as Fuzhou, Guangzhou, Nanning and Shenzhen to Danga Bay, lured by prospects of owning freehold land and the privileges that come with the MM2H programme.
In China, most land are leasehold, and the average leasehold in the mainland is about 70 years; thus the promise of owning freehold land is set to bring in a new wave of Chinese investors to Malaysia.
China's Hopefluent Group Holdings Ltd, which recently set up a venture in Malaysia to market properties under the MM2H programme in the mainland, had reportedly stated that the government's programme could spur RM1.4 billion worth of property purchases from Chinese investors.
Latest available numbers show the pace of investment for committed projects in Iskandar Malaysia was up by 49 per cent to RM7.56 billion in the second quarter versus RM5.06 billion in the first quarter.
The total cumulative committed investments since 2006 stands at RM118.93 billion as of June 30 2013, according to Iskandar Regional Development Authority.
With Iskandar Malaysia gaining traction among foreigners, the price of land in the area is showing no signs of calming down, with The New Sunday Times in a July 28 report citing Real Estate and Housing Developers Association Malaysia (Johor) chairman Koh Moo Hing as saying the prices of properties in Iskandar Malaysia had escalated beyond expectations.
Publish date: 12/08/13