Chinese developer plans US$3 billion project in Johor

Chinese developer plans US$3 billion project in Johor
Artist’s impression of the Danga Bay waterfront, as seen from Singapore.

The Greenland Group is the latest developer from China to purchase land for a property project in Danga Bay, Johor Baru.

It entered an agreement yesterday to buy 13.96 acres from Iskandar Waterfront Holdings Sdn Bhd (IWH) for 600 million ringgit (S$231 million) with plans to develop projects with a potential gross development value (GDV) of 2.2 billion ringgit. The transaction comes amid an environment where property developers are seeing lacklustre response from buyers for their launches in Johor.

The latest to feel the heat was Singapore's Pacific Star Development Pvt Ltd that saw only 25 per cent bookings in the second phase of its condominium project in Puteri Harbour that is located in Iskandar Malaysia.

The purchase price works out to 984 ringgit per sq ft, which is just below the record 991 ringgit psf that Hao Yuan Pte Ltd, a Singapore-based but China-owned firm paid for 37 acres in Danga Bay last December.

However according to sources, Greenland planned to purchase more land at lower valuations, an exercise that may average down its cost.

"This is only the beginning for Greenland which is a state-owned enterprise" sources said. The Shanghai-based firm is understood to be eyeing a GDV in excess of 10 billion ringgit in Danga Bay with several more transactions to be wrapped up in the coming months.

This is Greenland's maiden investment in Malaysia, for which it will form a joint venture with IWH to develop the land into an integrated project within five years.

Inclusive of the Greenland transactions, IWH has to-date inked 17 deals with local and foreign partners to develop properties worth 127 billion ringgit in GDV, providing a fillip to its ambitious plan of transforming the coastline of Johor bordering Singapore into a waterfront metropolis.

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