A Chinese developer is set to acquire 116 acres of land in Johor Bahru from the Sultan of Johor for RM4.5 billion, according to a statement released on the Hong Kong Stock Exchange website. Guangzhou R&F Properties is planning residential and commercial developments over six parcels of land with an estimated saleable floor area of approximately 3.5 million square meters.
The deal is a direct negotiation between Guangzhou R&F and the Sultan of Johor, comprising four parcels of vacant freehold land and two parcels of reclaimed freehold land. It was also reported that payment would be done by Guangzhou R&F over a period of three years in four installments.
Guangzhou R&F has already paid a deposit of RM100 million which will be deducted from the first installment payment. The report did not state the exact location of the parcels of land and whether there will be any local partners involved in the development.
The Chinese developer cited Malaysia’s sizable Chinese community, favourable government policies, growing property market and strong economic fundamentals as key factors for the investment.
Its preliminary plan is to develop the areas in phases that will include high-rise residential units, low-density housing, retail properties, offices, hotel and shopping mall.
A property analyst in Johor said that he had heard market rumours of the deal about a couple of weeks ago. “It’s difficult to comment any further because details are sketchy at the moment,” said the analyst.
Another analyst admitted to be surprised by the fact that the deal involves a state ruler selling freehold land to foreigners.
The deal would easily dwarf Country Garden’s RM800 million purchase of 57 acres of land from Iskandar Waterfront Sdn Bhd in 2012, the biggest investment to date by a Chinese property developer. Country Garden Holdings is China’s seventh largest property developer and ranked 783rd in Forbes list of Global 2000 companies.