Yes, this is as per what the title says. Country Garden Holdings Co Ltd, with Kumpulan Prasarana Rakyat Johor (PRJ) have planned a development of over 5,000 acres of reclaimed land. This is 3% the size of Singapore today!
Remember Country Garden? The developer which launched 9,000 units of condo in one go and announced that they have already sold 5,000 units? What about the rumour that it offered steep discounts as well as a buy one get one free offer? Even when I was with my former company, I do not believe such a case because unless the gross margin is so huge that it allows the developer to do so. Most of the time, the margin would not even allow for a heavy discount. Just look at the net profit for listed developers and you would see why.
This project is so huge that it is envisioned that it will take over 30 years to fully develop it. The project even includes a man made island which will be near the second link in Johor. The island is for luxury homes. The man made island has started work and recently raised some concerns about its environmental concerns. There has been a slight delay in the announcement of the project when MH370 went missing. Country Garden is a top 10 developer in China with over 20 years of experience in township development.
Today, my colleague said, what will happen to Iskandar. All these new developments, every developer is there and everyone is building. Would there not be a bubble? Truth is, before any developer builds, they have no choice but to do a study about the potential of the area. It is very improbable that any developer would just rush into a new place and develop without first understanding what it is getting itself into. Country Garden has certainly come into Malaysia in a big way and Iskandar is not its only development. It is also in the Klang Valley too. If we believe what their internal analysts say, perhaps Iskandar is just beginning to show its potential. No matter what, buy with the right objective in mind and you should be ok.
written on 16 June 2014
Next suggested article: Iskandar Malaysia – medium term prospects concern