The Star/Asia News Network
Tuesday, Dec 03, 2013
PETALING JAYA - China-based developer Guangzhou R&F Properties Co Ltd is buying six plots of land in Johor Baru for a whopping RM4.5 billion (S$1.76 billion) from the Johor Sultan, making it a record deal.
The investment, comprising high-rise residential units, low-density housing, retail properties, offices, a hotel and a shopping mall, is the Hong Kong-listed firm's maiden overseas venture.
"Malaysia, with a sizeable Chinese community and favourable government policy attracting foreign purchasers, is well-suited for the first venture of the group outside China," said the company in a filing with the Hong Kong stock exchange.
It also said it came to the RM4.5bil consideration through direct negotiation with the vendor and that its board considered the price to be fair and reasonable, given the market condition in Malaysia, location, development cost and potential of the land.
The developer said it had paid a RM100mil deposit, which would be deducted from the first instalment payment of the consideration.
According to Zerin Properties' chief executive officer Previn Singhe, the estimated sellable floor area of about 3.5 million sq m worked out to a plot ratio of 7.5 times, which is considered high, given that the land is worth about RM891 per sq ft.
Previously, another developer from China, Country Garden Holdings Co Ltd, had bought 22.26ha in Danga Bay for RM376 per sq ft. Comparing both, Previn said the latter's plot ratio was lower at 5.22 times.
"This is very good for Malaysia. Not only would it spur (our) real estate sector, but there would also be spillover effects in terms of other industries such as education, tourism, agriculture and many more.
"We are now an investment hotspot for companies from China," he told StarBiz.
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