March 27 2012
KUALA LUMPUR: Arab investors who were originally the master developers of 2,230 acres at Iskandar Malaysia known as the Medini development will no longer be involved and about 80% of that land has since been sold to other foreign investors, including those from East Asia.
“If the Arabs are not willing to develop the land, we cannot let the project be left idle, there must be activity on the land. In fact, we had initiated this (to get other investors) who are from China, South Korea and also Japan to invest in the land,” Iskandar Investment Bhd (IIB) president/chief executive officer Datuk Syed Mohamed Ibrahim said in an interview.
He added that the Arabs “will no longer be involved in Medini, but it was good that they came (initially).”
Five years ago, Abu Dhabi’s Mubadala Development Co was the leading consortium investing US$720mil (RM2.1bil) in Medini Iskandar Malaysia to jointly develop 2,230 acres. But the global crisis had thrown the Arab property world into disarray and that had somewhat slowed the development of the Medini parcel.
Hence, IIB had to get other investors, including those from Singapore, North Asia and domestic players.
“The interest (from the foreign investors) came to our office and we facilitated the deals with the foreign investors,” he added.
But it cannot be denied that the Arabs did put in the money when Malaysia wanted foreign investors to invest in Iskandar Malaysia, which is the country’s first economic corridor.
Since then, Malaysia has had investors from other parts of the world including domestic investors who had bought plots of land to develop. One of the bigger foreign investors thus far that has invested RM2bil in Medini’s development is Beijing-based real estate developer, Zhuoda Real Estate Group. The Sunway Group has bought 691 acres to undertake a mixed development.
The 2,230-acre Medini development would house lifestyle and leisure development. IIB’s overall land bank in Johor is 8,889 acres, of which 2,230 acres are for Medini and Legoland theme park and hotel. Nearby, there is also a educity, a wellness centre and a creative studio, UK-based Pinewood, that will be housed.
For the educity, nine universities and campuses will be sited and they include Singapore’s Raffles University, University of Southampton Malaysia campus, Malborough College Iskandar Malaysia, Newcastle University Medicine Malaysia, University of Reading Malaysia and the Netherlands Maritime Institute.
IIB is 60%-owned by Khazanah Nasional Bhd, 20% each by Employees Provident Fund and Kumpulan Prasarana Rakyat Johor.
Syed Mohamed said parties from China had wanted to buy the entire Medini area, but because it would be developed into a cosmopolitan area, they had to ensure there was a mix of investors from different parts of the world.
“We have got a nice problem as far as genuine interest from potential local and foreign parties for the land is concerned. We have a suite of investors and we have no restrictions to sell the plots of land to foreigners. There is a lot of interest for land and while there is limited land out there, we are not ready to open the over 6,000 acres for sale presently,” he said.
He would rather wait for land prices to appreciate before opening the over 6,000 acres for development.
Turning to Legoland, Syed Mohamed said the theme park, sited on 76 acres, will open its doors in the fourth quarter of this year. At a cost of US$700mil, the company is also getting a water theme park because of its strict procurement process.
“For the price of one we are getting two theme parks. The water theme park will open in 2013 together with the Legoland theme park hotel,” he said.
Thus far, IIB has managed to sell 10,000 of the unlimited one-year theme park entry passes which are being offered at a special price of RM195. He is targeting one million visitors per year but has yet to promote the theme park in Indonesia, which he believes has a huge potential market.