On a free day Tan Sri Lim Kang Hoo takes a ride on his helicopter to check out vacant land that he could get his hands on to increase Iskandar Waterfront Holdings Sdn Bhd (IWH) landbank. He also checks out land titles of abandon shophouses and buildings to trace the owners so those sites which house squatters can be redeveloped by IWH, which is the master developer of parts of JB city. He met up with StarBizWeek's B.K. Sidhu recently and here are excerpts of the interview:
The market is saying IWH and Khazanah Nasional Bhd are competing for the same investors. Your comment?
There is no competition as our products are different. Talk about competition, our land is mostly reclaimed land and theirs is inland land. Khazanah and the state government are building catalytic projects to attract local and foreign investors. Over the last two years, there has been a rush to the corridor and since Iskandar Malaysia was launched nearly six years ago, we have seen progress.
What we are creating is an urban city and Nusajaya is mostly landed and semi-D units, theme parks, edu-city, Pinewoods studio, industries and so on. Ours is more open to a lot of multinational companies and we would like the MNCs to come here as the cost of their 2 to 3 year rental in Singapore is the cost of owning a building here. We cater to a lifestyle concept that will attract them. So there is no competition as we are focusing more on high rise buildings.
When will the tram and MRT be ready and will IWH be involved?
The tram will only be there once we get into the second phase of the CBD development as we need a bigger area for the tram to run on and it should be completed by 2016. As for the MRT, the consultants have been appointed but we are not sure of the location as this is being done by the Federal Government.
IWH has seen a boost in its landbank from 486ha just 10 months ago to over 1619ha now. Did you get the land from the state government?
Apart from the take over of Tebrau Teguh which had some land, we have also bought land via bank auctions, took over failed and abandoned projects and from Danaharta. We did not get any land from the government, instead we are buying land. We continue to look for more land and any party that cannot develop the land in the city centre can talk to us. We have also bought about 20ha of land in the CBD which is land owned by people that are fifth to 7th generation and some of these land have been infested with squatters. .
So there is no land from the government.
IWH is hoping that Johoreans who have migrated will return to the state. Are they buying anything?
Amazingly 60% of units and plots of land sold are to Johoreans, 25% are to Singaporean and 15% foreigners.
It is also wrong to say Johoreans cannot afford property in Johor. They just did not have the opportunity as earlier developers were not focusing on lifestyle products like ones in KL and Singapore. The demand for lifestyle product is now (given the influence) from Singapore. Now that there is greater demand for lifestyle products, purchases are picking up.
Who's the next big buyer of land after China's Country Garden purchase of 55 acres of land in Danga Bay?
We are in talks with several parties, some are GLCs and they need government approvals. At least a few hundred acres are under negotiations but at some point we will stop selling when we have achieved the target because we do not want to create a property glut. It is a very focused approach that we have in terms of releasing land for development so that all what is built gets absorbed.
We have learnt as JB experienced the biggest glut from the 1997 Asian economic crisis and it has not fully recovered.
A listing for IWH and REITS in the future?
IWH is growing and there will be recurring income over the next 15 years, we are assured of that. When we sell land we buy more land and with that our acerage grows. All this is done together with the state government agency, KPRJ. So naturally, we will be looking to list IWH and definitely we are looking at next year for the listing though we need sometime to make submissions. We also have not appointed our investment bankers. It will be on Bursa Malaysia and we may even explore a dual listing.
We have one division working on REITS.
What's the plan for the 127ha at Desaru?
We will construct a lifestyle living concept, resort and hotel there as there will be a lot of people who will come because the oil and gas hub is taking shape in Pengerang. They will need housing and we want to attract expatriates.
Again, this land was purchased from Danaharta and not given by the government.
Why you think reclaiming land is better?
When we started 15 years ago. Four contractors ran away because they could not reclaim land at Danga Bay. I decided to buy my own equipment and reclaim the land. We have the expertise and why let the land be soaked in the sea when we can reclaim it and built something on it? Look at Singapore. They have reclaimed a lot of land and expanded their coastline.
Iskandar Waterfront Holdings gets the task of remaking Johor Baru