Friday, March 12, 2010

JB bets on RM12b project for its buzz

A PLANNED jumbo-scale commercial development on the current Majidi army camp site could make shopping in Johor Baru city a vastly different experience when the RM12 billion (S$5 billion) project is completed over the next decade.

The blue-print of South Key – the fully-integrated commercial development – which envisages street malls, offices, hotels and shop-lots, is to be built on 300 acres (121.4 ha, about the size of 270 football fields) in the city, said CH Williams Talhar & Wong director Danny Yeo Soon Kee.

Australia’s Cox Architects is involved in the project. The whole development has been planned in accordance with a security study that was ‘four to five inches thick’, Mr Yeo told BT. ‘A lot of security issues have been taken into consideration and CCTVs – even in the back lanes – would be linked to a centralised monitoring system overseen in conjunction with the police.’

CH Williams is the marketing agent for the project which is being developed by South Key Properties Sdn Bhd, a private company held by a group of shareholders including 30 per cent owner Kumpulan Prasarana Rakyat Johor (KPRJ).

A fully-owned subsidiary of the state government, KPRJ also holds a 20 per cent stake in Iskandar Investment Bhd (IIB), the entity tasked with attracting investors into the Johor economic zone. National investment agency Khazanah Nasional owns 60 per cent of IIB and the Employees Provident Fund the remainder 20 per cent.

South Key’s gross development value is estimated at RM12 billion, with the project stretching over 12-15 years; the first phase would see the launch of four storey shop-lots, and is scheduled for the middle of the year.

Mr Yeo said that ’specific businesses’ would be invited to participate as it was important to have the right tenant mix which at this point includes signature corporate offices, banks and financial institutions.

‘The whole thing will be strata titled,’ he said, adding a massive car park would be located below the entire development which would boast ‘a different shopping experience.’

Half of Camp Majidi has been vacated while arrangements are being made for the rest to relocate. According to media reports, the camp had been privatised in the 1990s.

The development is located within the ambitious Iskandar Malaysia economic zone which the government has actively promoted since it was unveiled in 2006.

Various incentives have been dangled at investors including lower taxes for companies in specific sectors to set up in Iskandar but it is unclear how many have taken up the offer.

Despite being strategically located next to Singapore, the southern city lacks ‘buzz’. Previous attempts to launch commercial and retail developments in the 1990s met with mixed success, with the result that resuscitation efforts are still on-going for those that floundered

Mr Yeo believes South Key would be different. Besides being located across the Causeway, the project has been designed to contain the ingredients attractive to investors and visitors, and also addresses the apprehension that most Singaporeans feel about the state of crime in Johor Baru.

Source: Business Times, 12 Mar 2010

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