Tycoon Robert Kuok’s record payment for land in Johor is talk of the town in M'sia-S'pore

PETALING JAYA: The price that tycoon Robert Kuok
is paying for a piece of 5.06ha freehold land in Puteri Harbour, Johor,
has become the talk of the town and even across the causeway, where the
Singaporean media is hailing it as the “new price benchmark” in
Nusajaya.
The views on the transaction are varied, though. While Singapore's Business Times
wrote that it was a record price for the Nusajaya land, substantiating
it with the toppish RM334 per sq ft (psf) price paid by Kuok, there are
others who are claiming that the billionaire is getting the land on the
cheap.
To recap, Southern Marina Development Sdn Bhd (which is 70% owned by Kuok-related companies and the remaining by Khazanah Nasional Bhd) is paying RM182mil (or RM334 psf) to UEM Land Holdings Bhd for a 5.06ha parcel of land in Puteri Harbour.
This price works out to a significant 58% premium over what a consortium of corporate tycoons Tan Sri Surin Upatkoon, Tan Sri Lee Oi Hian, Tan Sri Wan Azmi Wan Hamzah, and Wee Ee Chao had paid for a 17.81ha plot also in Puteri Harbour. The vehicle the tycoons used, Liberty Bridge Sdn Bhd, paid UEM Land RM401mil, which works out to only RM211 psf.
Real estate investment consultant Gavin Tee Swee Heng told StarBiz
that the land was considered a good purchase due to the vast potential
in that prime area, but noted that it was definitely “not cheap.”
An analyst pointed out that the land had been appraised by property valuer Messrs Assetz Sdn Bhd
at RM330 psf, so Kuok is paying 1.21% higher than the valued price, and
it was justified by the fact that it was one of the rare parcels of
land that was facing the marina.
However, to be noted is the fact
that another recent transaction in Iskandar Malaysia was done at a
higher price than what Kuok is paying. Last December, mainland Chinese
firm Country Garden Holdings Co Ltd paid a total of RM900mil, or RM376 psf, for a 22.26ha land in Danga Bay.
The analyst explained that there was generally a price difference between land in Danga Bay and Puteri Harbour.
“Danga
Bay sits in flagship zone A or Johor Baru, while Puteri Harbour is
situated in flagship zone B under Nusajaya. Furthermore, Danga Bay is
reclaimed land, and, hence, carries higher infrastructure cost,” said
the analyst.
Tee is bullish on the development around Puteri Harbour.
“Puteri
Harbour will be the number one play (in the region) in terms of class,”
he said, adding that its value should be the highest in the vicinity
due to the marina lifestyle conceptualised and target market which
consisted of the international business and corporate population.
Meanwhile,
concerns arose in the social media arena as some commentators claimed
the land was cheap based on the projected development value.
Recall
that the proposed development by Southern Marina would comprise a mix
of residential and commercial development with a gross floor area of
more than two million sq ft, at an estimated gross development value
exceeding RM1bil.
Said Tee: “The land is definitely not
considered cheap. There are many unforeseen costs that the developer
might have to bear, as it takes time to develop the area.
“There is also a fair bit of holding cost that would incur over the period of time.”
Another consideration of the valuation of the land would be the plot ratio approved by the authorities, he added.
Besides
that, he reckoned that there would definitely be some form of risk that
developers had to take, as the development in Nusajaya was still
considered at its initial stage and it would entail extra costs for them
to hold until the area matured.