KUALA LUMPUR: The long speculated entry of the Kuok Group into Iskandar Malaysia finally materialised yesterday with the group buying two parcels of land in Puteri Harbour, Bandar Nusajaya, for RM182 million.
The two parcels of freehold land, measuring 12.5 acres (5.05ha) will be developed, in a joint venture with Khazanah Nasional Bhd, into a mix of high-rise residential and retail/commercial units with a marina and a view of the Straits of Johor.
Although the land is relatively small compared to other major developments in Iskandar, Puteri Harbour is considered a choice location — the prime land is also one of the few parcels left there.
The entry of the Kuok Group, owned by billionaire Robert Kuok, comes as the country goes into its final lap of a hotly contested 13th general election.
In this election, Johor — traditionally a BN stronghold — has become the centre of attention because the opposition DAP has made the state its frontline charge against the MCA.
“The Kuok Group’s entry into Iskandar will be viewed as an endorsement for the present administration from one of Malaysia’s best known businessman who has stopped investing actively in his home soil since 1990s,” says an observer.
Kuok, Malaysia’s richest man also known as the “Sugar King”, is from Johor but has most of his assets outside the country.
After selling Malayan Sugar Manufacturing Sdn Bhd to Felda Global Ventures Bhd in 2009, his most notable flagship company here would be the PPB Group Bhd.
Apart from PPB, Kuok also controls Shangri-La Hotels (Malaysia) Bhd.
According to industry officials, apart from Khazanah Nasional Bhd, caretaker Prime Minister Datuk Seri Najib Tun Razak had a hand in getting Kuok to invest in Iskandar Malaysia.
“Najib had personally met Kuok to broach the idea of him putting money in Iskandar,” said the officials.
In developing the 12.5 acres, the Kuok Group together with PPB Group Bhd will hold 70% in the joint venture company called Southern Marina Development Sdn Bhd. The remaining 30% will be held by Khazanah.
Southern Marina will buy the two parcels of freehold land from UEM Land Holdings Bhd (ULHB) — presently unconverted with agriculture status — for a cash consideration of RM182 million (about RM334 per square feet [psf]).
In its latest launch, senior officials of ULHB had said that they were selling apartments at RM700 to RM800 psf in Puteri Harbour with a lot of foreign interest.
In a joint press statement issued yesterday, ULHB said the sale of the parcels of land was another step in achieving its objective of having developments within Nusajaya built by multiple developers.
The disposal of the land is expected to accelerate development in Puteri Harbour and create commercial activities and spillover effects that will add value.
Kuok Brothers director and chairman of PPB Group, Datuk Oh Siew Nam said they are excited about the opportunity to participate in the on-going development of Iskandar.
“We are confident that Iskandar’s good infrastructure, facilities and connectivity will continue to attract strong interest from local and international investors into Iskandar Malaysia,” said Oh.
Khazanah managing director Tan Sri Azman Mokhtar described the entry of the Kuok Group as a vote of confidence for Iskandar.
“A vote of confidence from reputable conglomerates such as the Kuok Brothers Group will only help to catalyse further investing interest for the continued progress and ultimately, the success of Iskandar Malaysia,” he said.
In a statement to Bursa Malaysia yesterday, ULHB said the disposal is expected to be completed within a year from the date of the agreement, and is estimated to bring in RM108 million in gross profit for its financial year ending Dec 31, this year.
Bandar Nusajaya Development Sdn Bhd, a subsidiary of UEM Land Holdings, bought the parcels of land between May 1994 and June 1995 at an approximate cost of RM1.8 million. Bandar Nusajaya Development was formerly known as Prolink Development Sdn Bhd.
This article first appeared in The Edge Financial Daily, on April 23, 2013.