Tie up with developers, Iskandar Waterfront City told

PETALING JAYA: Iskandar Waterfront City Bhd (IWC), formerly known as Tebrau Teguh Bhd, should tie up with other property developers or generate cash from land sales to undertake bigger developments.

In a report yesterday, Kenanga Research noted that being open to joint ventures (JVs) or land sales could help expedite the realisation of the company’s Tebrau River landbank.

It said that Johor-based IWC, which owns some 980 acres of water-fronting landbank along the Tebrau River line, would, however, first need to reclaim 786 acres from the sea.

“We gather that a lot of the reclamation area is in very shallow waters, requiring less sand for reclamation. We estimate that the cost of reclaiming the entire 786 acres is RM822mil based on a reclamation cost of RM24 per sq ft (gross land basis), which would be largely financed by the rights issuance and some borrowings.

“Land sales or JVs could provide IWC with more upfront cash to undertake bigger developments along their landbank,” the research house said.

IWC’s 980-acre land was contiguous and strategically stretched from the Ponderosa Golf and Country Club up till Bandar Baru Permas Jaya and mostly fronts the river/sea with easy connectivity to the Johor Baru City Centre through the Eastern Dispersal Link Expressway, Kenanga noted.

The research house also highlighted that IWC had recently tied up with Tropicana Corp Bhd via a 30:70 JV company to develop 60 acres along the Tebrau River.

“The project has an estimated gross development value of RM3.7bil and will be a mixture of residential and commercial developments. The land sale to the JV company amounts to RM444.3mil (assuming there is no set-off arrangement), which includes RM190mil in reclamation cost.

“This translates to a land cost of RM170 per sq ft (gross land basis) and IWC will receive net gains on disposal of RM157mil before minority interest.”

IWC is a property developer and construction group which is 47% owned by Iskandar Waterfront Holdings Sdn Bhd, the master developer of the Flagship Zone “A” of the Iskandar Malaysia development in Johor.

The company is principally involved in property development, construction and property management, with other operations in property investment and investment holding.

IWC has landbank for residential and commercial development in Johor, Selangor and Negri Sembilan. Its ongoing development projects include Botanika Bayu Puteri at Danga Bay, Johor Baru.

~ By THE STAR