Attractive partners sought for Desaru Coast

This article first appeared in The Edge Malaysia Weekly, on August 6, 2018 - August 12, 2018.
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SOVEREIGN wealth fund Khazanah Nasional Bhd’s leisure and tourism arm, Themed Attractions Resorts & Hotels Sdn Bhd (TARH), is selling six sea-fronting parcels of land in Desaru Coast in Desaru, Johor. The total of 55 acres are for the development of premium guest accommodation.

Potential investors, who can choose from the parcels that measure between 4.6 and 11.58 acres, are required to build accommodation that is four-star and above and deliver it within three years.

“The six pieces of land are part and parcel of the master plan to develop Desaru by adding more keys to the destination. But not all the keys should be owned and driven by TARH. That is why we are seeking expressions of interest (EOI) from the market,” says TARH group CEO Amir Hamzah Azizan when asked to comment on an advertisement inviting bids for land in Desaru Coast that was spotted by The Edge. “We want them (potential investors) to develop the accommodation, be it resorts, villas, hotels or serviced apartments.”

TARH has hired CBRE | WTW as its exclusive marketing agent to source for and handle the EOI submissions, the deadline for which was July 25.

“Our preference for EOI is to develop the parcels within the next three years and in outright land sales,” Amir adds.

In their EOI, investors have to submit the details of what they propose to build on the land. The conditions of the land sale are that the development must be completed within a specified time frame and the product has to be four-star and above.

“As one tries to bring in tourist dollars, one would need to curate at a certain level. If you tell me you are going to buy the land and hold it, we are probably not going to sell it to you,” says Amir of the land, which forms part of Phase 1 of the Desaru Coast development.

Although he declines to specify how much TARH hopes to get from the exercise, as all the six parcels are beachfront, he says the company is expecting “a pretty decent rate”.

The Edge understands that no price comparisons can be made as there has been no land transaction in the Desaru area recently. However, industry estimates put the price of land in nearby Pengerang at between RM50 and RM70 psf. If these prices are anything to go by, the conservative value of the 55 acres is between RM120 million and RM168 million.

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