KUALA LUMPUR: Iskandar Waterfront City Bhd (IWCB, formerly known as Tebrau Teguh Bhd) shares rose as much as nine sen or 6.2% to reach RM1.54 at noon yesterday, just as the signing took place in Shanghai between the company and China’s Greenland Group on a major land deal worth RM2.4 billion. 

However, the disclosure of the deal — concerning the sale by IWCB to Greenland of 128 acres (51.8ha) of land in Plentong, Johor — only appeared on Bursa Malaysia’s website after 4pm, together with the suspension of trading in IWCB securities from 4.08pm. 

The disclosure to Bursa came substantially later than a media statement from IWCB (fundamental: 1.65; valuation: 1.5) that was sent out shortly before 2.30pm. 

It was puzzling that the trading in IWCB securities was not suspended in the morning before the signing in Shanghai, or before the press statement was released. 

When contacted, a Bursa spokesman told The Edge Financial Daily that the disclosure of all corporate announcements was the company’s sole responsibility. 

“They have access to a link with which they upload information onto Bursa’s website,” the spokesman said when asked if there could have been a possible glitch in the system, which led to the delay in IWCB’s disclosure. 

Nevertheless, IWCB’s latest land deal in Iskandar Malaysia has attracted attention in the market.

Yesterday, Shanghai government linked-Greenland Group and IWCB signed a deal to jointly develop the Tebrau Bay Waterfront City via a special purpose vehicle known as Greenland Tebrau Sdn Bhd (GTSB). 

Johor government-linked IWCB will hold 20% of GTSB via a wholly-owned unit Southern Crest Development Sdn Bhd, while Greenland will have the remaining 80% via Greenland Malaysia Real Estate Operator Sdn Bhd. 

Southern Crest’s portion of the initial investment will be funded via internally generated funds. 

According to the Bursa filing, both parties had entered into a shareholders’ agreement to acquire three pieces of freehold land in Mukim Plentong, measuring a total of 128 acres, from Tebrau Bay Sdn Bhd (another wholly-owned unit of IWCB) for the mixed development. 

Of the total area, 78.57 acres are partially submerged while 48.78 acres are submerged land.

The Bursa filing did not mention the transaction value of the land, but the statement issued earlier by IWCB put it at RM2.4 billion, translating into RM430.50 per sq ft.

When contacted, property consultants said they were not able to comment on the fairness of the RM2.4 billion price tag, as they were not privy to the conditions of the sale. 

However, KGV International Property Consultants executive director Samuel Tan said the deal shows there are still parties who have confidence in Iskandar Malaysia despite the economic slowdown. 

“It sends a positive vibe to the investment market. Secondly, this deal is a major departure in that foreign developers are not focusing on the usual areas such as Danga Bay, Medini Iskandar Malaysia and Nusajaya. They see potential in the eastern corridor of Johor Baru, which in terms of travelling distance, is easily accessible to the city via the Eastern Dispersal Link Expressway,” he said in an email reply. 

Johor Menteri Besar Datuk Seri Mohamed Khaled Nordin, who was in Shanghai to witness the signing, said high-impact foreign direct investments (FDI), including from China, are necessary to jump-start economic activity in Johor.

“I welcome their long-term strategic interest to jointly transform Johor Baru into a modern international waterfront city and destination,” he said in a statement. 

The deal represents Greenland Group’s second investment in Iskandar Malaysia.

Last April, it invested RM600 million in a joint development of 13.6 acres in Danga Bay with Iskandar Waterfront Holdings Sdn Bhd (IWH), on which a RM2.2 billion integrated mixed property project is coming up.

IWCB is 47%-owned by IWH, which is deemed a public-private partnership involving federal, state and private interests, with its shareholders comprising the Johor government through its investment arm Kumpulan Prasarana Rakyat Johor, and Tan Sri Lim Kang Hoo.

IWCB shares were transacted at RM1.54 before trading was suspended in the late afternoon, with a market capitalisation of RM1.03 billion. 

Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on January 22, 2015.