Joining Hands on Developing Waterfront Township
March 2013
CapitaLand Group announced its most significant strides into Malaysia with two breakthrough deals last month. Through its subsidiary, CapitaLand Malaysia, it will jointly develop a S$3.2 billion waterfront township along Johor’s southern coast. The agreement, between CapitaLand, Temasek Holdings and Malaysia’s Iskandar Waterfront Holdings (IWSB), marks CapitaLand’s first direct large scale township investment and development in Malaysia.
“Given the close proximity and the strong bilateral ties between Malaysia and Singapore, and the increasing investor confidence in Iskandar Malaysia, CapitaLand finds this a compelling investment opportunity in a new upcoming development region,” said Mr Lim Ming Yan, President and Group CEO, CapitaLand Limited.
In addition, The Ascott Limited (Ascott) has been awarded a contract to manage its second serviced residence in Iskandar Malaysia. The 310-unit Somerset Medini Iskandar will be Ascott’s largest property in Malaysia when it opens in late 2015.
“We see immense potential for serviced residences in Iskandar. The economic corridor has attracted investments of over RM106 billion. Ascott will gain significant advantage by having a serviced residence in Medini, one of the fastest-growing areas within Iskandar. It is surrounded by exciting developments that will spur the growth of the Malaysian economy. This will bring a strong influx of expatriates as well as foreign and domestic travellers, creating demand for our serviced residence,” said Mr Chong Kee Hiong, CEO of The Ascott Limited.
The two prominent projects are set to strengthen the Group’s footprint in the country.
Joining Hands on an Island Project
To seal the partnership to develop the multi-billion-dollar township, CapitaLand Malaysia, Temasek Holdings and Iskandar Waterfront Holdings signed a Heads of Agreement at the Danga Bay Convention Centre. The ceremony was witnessed by Malaysia’s Prime Minister Datuk Seri Mohd Najib Tun Abdul Razak and Singapore's Prime Minister Mr Lee Hsien Loong.
CapitaLand Malaysia, IWSB and Temasek will hold 51 per cent, 40 per cent and 9 per cent respectively in the joint venture. The development will be located on the island of Danga Bay, in one of five flagship zones earmarked for special development in Iskandar. The 71.4 acres or 3.1 million square feet of freehold net land known as “A2 Island” that will be devoted to the project will be jointly purchased at the price of RM811 million or approximately S$324 million. The land purchase price will be paid over a period of four and a half years, corresponding with the infrastructure and development phases.
The premier waterfront residential community will be a hub comprising high rise and landed homes as well as a marina, shopping mall, restaurants, serviced residences, offices and recreational facilities. The project, with an estimated total gross floor area of 11 million square feet, will draw upon the Group’s multi-sector development and management capabilities in homes, offices, shopping malls and serviced residences to create a safe and desirable lifestyle destination. To be built in phases over 10 to 12 years, it enjoys prime location just 29 kilometres away from Legoland and EduCity in the west. Its proximity to the the newly-constructed Coastal Highway will also increase its accessibility.
“This will be our first direct large scale township investment and development in Malaysia. With the site’s strategic location, we are confident that the development will be attractive and well-received by the market,” said Mr Lim.
Together on Urban Wellness
Another cause for celebration is the contract Ascott signed to manage Somerset Medini Iskandar. The serviced residence is part of the ‘Urban Wellness’ integrated development by Pulau Indah Ventures Sdn Bhd which is a joint venture between Khazanah Nasional Berhad and Temasek Holdings (Private) Limited. The new development’s ground-breaking ceremony was officiated by Malaysia’s Prime Minister Najib Razak and Singapore's Prime Minister Mr Lee Hsien Loong.
“Ascott will be the first international serviced residence operator in Iskandar when we open Somerset Puteri Harbour next year. The addition of Somerset Medini Iskandar strengthens our presence in this burgeoning region. Somerset Medini Iskandar further enhances Ascott’s position as the largest international owner and operator of serviced residences in Malaysia. We now have 10 properties with more than 1,800 apartment units in the country. This expansion will allow greater synergy and economies of scale in our operations,” said Mr Chong.
The 33-storey serviced residence is in Medini in Johor's Iskandar region, which is about 15 minutes from the Malaysia-Singapore Second Link and 25 minutes away from Johor's Senai International Airport by car. The property is also next to the new private healthcare complex, Gleneagles Medini Hospital which boast 300 private beds and a 150-suite medical office block; and Medini Lifestyle Mall, the largest retail centre in South Malaysia. In addition, as part of the integrated development,Somerset Medini Iskandar will be connected to a four-storey wellness centre, a five-storey corporate training centre with meetings and conventions facilities, as well as retail outlets.
Expatriates and travellers can look forward to a range of studios, one-, two- and three-bedroom apartments that are fully furnished with modern amenities. Providing work-life balance are facilities including a gymnasium, swimming pool, restaurant and children’s playroom.
Ascott currently operates Ascott Kuala Lumpur, Citadines Uplands Kuching, Somerset Ampang Kuala Lumpur, Seri Bukit Ceylon Residences and Marc Service Suites in Kuala Lumpur. Three more properties will be added to fold: Ascott Sentral Kuala Lumpur which will open this year, the Citadines D’Pulze Cyberjaya which will open in 2014, and the Somerset Damansara Uptown Petaling Jaya which will open in 2016.
With these exciting partnership opportunities to invest in and develop such a large scale township in Malaysia, CapitaLand looks forward to further strengthen its footprint in the country.