IWCity gets additional JB land, to increase value of masterplan

Artist impression of Botanica @ Tebrau Coast by Tebrau Teguh Bhd

KUALA LUMPUR: Iskandar Waterfront City Bhd’s (IWCity) unit Tebrau Bay Sdn Bhd (TBSB) will end up with an additional 107.2 acres in Plentong, Johor Baru, under a land exchange deal struck with the Johor state government.

However, TBSB will also have to fork out RM309.12mil, to be satisfied partly in cash and partly by absorbing the cost of a construction job to be done for the state government.

In a filing with Bursa Malaysia, IWCity said under the alienation cum development agreement signed on Tuesday, the Johor government would compulsorily acquire 121.58 acres of freehold agricultural land from TBSB for a total compensation sum of RM222.8mil.

In consideration of TBSB’s irrevocable agreement to the compulsory acquisition, the state government would alienate 228.78 acres, also in Plentong, to TBSB for RM531.92mil.

These alienated lands, which are adjoining TBSB’s existing coastal land in Plentong, will require reclamation as they are completely submerged.

TBSB will have to settle the RM309.12mil difference between the compensation for TSSB land and the cost of the alienated land in cash and kind.

Among others, it will be required to build 570 residential units and nine shoplots on the state-acquired land for the Johor government at its own cost (RM189.12mil construction cost plus ancillary costs of RM9.94mil).

It will also pay RM100mil in cash as the premium imposed by the relevant state authority for the land alienation, and pay RM10mil in cash to Johor state government’s unit Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ).

(KPRJ is also a substantial shareholder of IWCity, with a 6.4% direct stake and 37.8% indirect.) 

The RM10mil cash payment will be used to build a multi-purpose hall in Bandar Baru Permas Jaya, Johor Baru.

On the benefits of the proposed alienation and development, IWCity, a master developer within Flagship A of Iskandar Malaysia, said the state government’s decision to alienate more lands to be included in the masterplan affirmed further its confidence in IWCity.

“The expansion of the masterplan via the lands alienation by the Johor state government will allow IWCity to increase the overall value of the masterplan and Iskandar Malaysia as a whole,” the company said.

On completion of the proposed alienation and development, the size of the IWCity group’s land banks is expected to increase to about 1,052 acres.

IWCity said the proposed alienation and development was expected to be completed by the first half of next year and was not expected to have any material effect on the group’s earnings and earnings per share for this financial year ending Dec 31, 2017.