MALAYSIA - Medini Iskandar Malaysia is a world-class approved development of 2,230 acres/96 million sq ft with gross floor area of 182 million sq ft complete with infrastructure. Designed as an international metropolis, it is meant to attract international population and tourists to live within a sustainable development.
Medini, being in one of the flagships in Iskandar Malaysia, located within the Nusajaya Flagship Area, has strong support from the Johor state government. It is envisioned to attract foreign purchasers in hordes.
Leases for foreigners
This unique development has come up with a special way to deal with foreign purchasers. Instead of foreigners directly buying the freehold land, Iskandar Investment Berhad (IIB) has appointed Master Concessionaire Lease Developer (MCLD) / Subsequent Layer Investor (SLI) who would sell leases to end purchasers.
This means that what the end purchasers acquire is only a lease for a certain period of time, namely 99 years, and in some cases, an option for a further 30 years. Since the investment and development concept in Medini involves local retention of freehold ownership, the concept of ownership for foreigners in Medini is based on a lease structure whereby at the end of the lease period, the land will revert to IIB.
Each transaction carried out by the registered lessee will only involve a lease transaction and will not affect the freehold title of the land. So what the purchaser gets is a lease which can be said to be a long- term tenancy and not a leasehold.
This sale of leases is perhaps one of the first of its kind in Malaysia although it is a well-known practice in other countries like Australia and Canada. In these countries, there are special legislations relating to sale of leases in stratified developments.