Country Garden to strengthen presence in Malaysia

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COUNTRY Garden Holdings Co Ltd, one of the largest property developers in China, is looking to strengthen its foot-hold in Malaysia as it believes the property sector here offers attractive development opportunities.

"The group is already in talks and looking at potential locations, and we are prepared to develop more projects," Country Garden's regional president Kayson Yuen says in an email interview.

Country Garden expects to launch its maiden project in Malaysia on Aug 11, just eight months after acquiring a 57-acre tract in Danga Bay for more than RM900 million from Iskandar Waterfront Holdings Sdn Bhd last December.

Country Garden Danga Bay, the company's first project on its own outside China, has a gross development value of RM18 billion. It will be developed via its unit Country Garden Danga Bay Sdn Bhd (CGDB).

Yuen notes that another local unit, Country Garden Properties Sdn Bhd (CGP), with its joint venture partner Malaysia Land Sdn Bhd, is about to launch two more projects here, in Rawang and Kajang, Selangor.

Luo Jin Rong, Country Garden Holdings' vice-chairman and general manager of strategic business development, says the company's venture into Malaysia was a natural progression as it had reached critical mass in China.

"We have also explored prospects in other countries like Canada, Russia and Australia, but we favour Malaysia for its natural climate and steady political environment," he told Malaysian and Singaporean journalists in Guangzhou, China.

Yuen reasons that with the Malaysian population growing 21% over the last 10 years, Malaysia's property industry offers various development opportunities. Property buyers are expected to increase rapidly in the near term, supported by Malaysia's economic stability, he adds.

"While other countries such as mainland China, Hong Kong, Taiwan and those in Asean are controlling the fluctuating prices of their properties, Malaysia has introduced policies [to develop Iskandar Malaysia], which has attracted huge foreign investments," says Yuen.

Country Garden Danga Bay, located in Iskandar's Flagship Zone A, will be developed over three phases. The first phase will see the construction of a luxury clubhouse, commercial tower, shopping mall and high-end serviced apartments at an expected cost of RM2 billion.

The average price for the residential units starts from RM700 psf. It is understood that the development will have more than 9,000 condominium units and commercial developments, such as a shopping mall and commercial boulevard.

Yuen believes that Johor Baru's rapid development can be attributed to the government's policy to develop Iskandar, and that this has led to the high demand for properties in Johor. He says the policies of Iskandar Regional Development Authority, a government development body, have taken Malaysia's property industry to another level.

"The introduction of the Rapid Transit System (RTS), which is expected to be completed by 2018, and the High Speed Rail (HSR), which connects Kuala Lumpur to Singapore, has made Johor Baru one of the best places to invest in Malaysia," says Yuen.

He adds that the rapid economic growth in the southern state has prompted Country Garden to build the first waterfront metropolis in Iskandar. The group hopes that the enhancement of Johor's transport system will provide convenience to the residents of Danga Bay.

Yuen says property buyers and investors in Malaysian properties usually purchase property based on the local setting and quality of life. "Although the Danga Bay project has not been officially launched, the response received from the public, especially from Malaysia, Singapore and China, is huge," he says.

The group is said to be targeting a mix of local and foreign buyers, including those from Japan, South Korea, Taiwan, Australia, Hong Kong and the Middle East. Yuen says the country's Malaysia My Second Home programme has attracted many foreigners, which has painted a positive outlook for foreign investments in Malaysia.

The development master plan for the Danga Bay site includes a world-class marina, boardwalk, restaurants offering fine dining, and sophisticated leisure and entertainment facilities. This is in addition to luxury serviced apartments and high-end villas to be developed in the later stages.

"Country Garden will be the first in the city to create a one-stop lifestyle for the residents. We believe these amenities and features will definitely attract local and international buyers," says Yuen.

Danga Bay is part of the ambitious multibillion-ringgit Iskandar Malaysia project aimed at transforming Johor into the metropolis of the south.

"Coupled with Malaysia's average annual economic growth of 5%, the investment situation is excellent. Country Garden is confident about Malaysia's future economic prospects," says Yuen.

He also points out that compared with Singapore's property prices, Country Garden offers a competitive price for a quality end-product. "We believe the reception for the Danga Bay project will be well-received once the brand and products are well-known to the public."

Yuen says Country Garden has invested RM50 million in a month-long Country Garden Danga Bay Universal Carnival, beginning Aug 11, in conjunction with the launch of the project.

Guangzhou-based Country Garden is China's seventh largest property developer and fifth largest in terms of assets. It also has projects in 19 other provinces in the country.

"Today, Country Garden applies the same five-star living concept in our projects in China to the Danga Bay project, providing quality homes at affordable prices in a rapidly developing city," says Yuen.

The Danga Bay project is similar to the group's 425-acre Cullinan Garden Bay project in Guangzhou. The Cullinan Garden Bay development comprises several high-rise residential buildings, ranging from 18 storeys to 31 storeys, as well as 95 houses, bringing the total to about 4,233 residential units.

"Our projects are always located in potential urban areas, integrates various designs, high-quality products, state-of-the-art landscapes, and has compact amenities and first-class property management," he adds.

The group is currently in the midst of developing other luxury projects in Guangzhou, including Shunde Country Garden Diamond Villa — a European-style development that will be completed in 2015. It is also expanding its Country Garden Ten Mile Coast project, and has completed its Country Garden Phoenix City project that comprises a five-star hotel and homes for 50,000 residents.

The Country Garden Ten Mile Coast project is located along Shenzhen's coast in what is considered to be the Hong Kong-Shenzhen Metropolis International Coastal City. The project, which was launched in 2011, has attracted investors and tourists, mainly from Hong Kong and Macau. According to Country Garden, most of the homes in this project were sold on the opening day.

When asked if the Chinese government's measures to cool the property sector had affected the group, Yuen declined to comment.

Country Garden Holdings is listed on the main board of the Hong Kong Stock Exchange and has a market value of HK$118.9 billion (RM49.7 billion) and annual sales of more than RMB47.6 billion (RM25.2 billion).

This story first appeared in The Edge weekly edition of August 5-11, 2013.