Tropicana's key developments

TROPICANA Corp Bhd is sitting on developments with an estimated RM70 billion in gross development value in hot spots like Iskandar Malaysia, Penang and the Greater Klang Valley. To offload such a huge pipeline, the developer will have to ensure that each project has a strong selling point. Here are three of the group's key developments.

Tropicana Canal City, Selangor

The single largest portion of Tropicana's potential GDV lies in Tropicana Canal City in Shah Alam, which has an estimated GDV of RM20 billion. This massive project sits on 1,172 acres of prime land that was acquired from Permodalan Negeri Selangor Bhd (PNSB) in April for RM1.3 billion, which will be paid over the next 12 years.

Located next to IJM Corp Bhd's Rimbayu township, Canal City will be developed as an integrated township. Group CEO Datuk Yau Kok Seng says the development's location between Shah Alam and Subang Jaya offers it excellent connectivity. In fact, the group is getting approvals to relocate the current KTM station in Batu Tiga to Canal City, he says, giving the township access to the Klang Valley's fast developing public rail transport network.

Yau says the group is looking to potentially parcel out smaller tracts in Canal City to other developers. This will help bring forward some of the cash flow and fund the construction of the necessary infrastructure to link Canal City to the surrounding highways.

Tropicana Danga Bay, Johor

Down south, the group's RM7.4 billion GDV Tropicana Danga Bay lies at the doorstep of Singapore. Likening Iskandar Malaysia to Shenzen in China, Yau expects the region to benefit immensely from the high earning power of its neighbour.

The Tropez Residences at Danga Bay, which is priced at more than RM1,000 psf, have already recorded an 80% take-up rate — or the sale of all non-bumiputera units. Most of the sales have been to Singaporeans, says Yau, noting that units facing the city-state have been able to command an additional 20% premium or more.

Yau says the Danga Bay land had been acquired at a very low cost of about RM190 psf, giving the group a very comfortable margin.

Penang World City, Penang

The bulk of the group's 2013 targeted sales will come from Penang World City, with RM819 million worth of projects to be launched by the third quarter of this year. The group's Penang land only accounts for 5.3% of its total landbank, but is 14.6% of its total GDV.

With the limited land on the island, the 102.6-acre integrated waterfront city located just south of the Penang bridge is a one-of-a-kind opportunity. The total estimated GDV of the project is RM10 billion, including a retail element that comprises roughly one million sq ft of net lettable area.

The first four blocks of the high-end Tropicana Bay Residences condominium are 76% booked after opening for registration.


This story first appeared in The Edge weekly edition of June 17-23, 2013.