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Monday, September 1, 2008

KSL plans to expand landbank in Iskandar Malaysia

KSL Holdings Bhd sees strong growth prospects in the Iskandar Malaysia growth corridor and is looking to expand its exposure and landbank there.

The Johor Baru-based company currently has four ongoing integrated developments located in the corridor – Taman Nusa Bestari on 91.9ha, Taman Bestari Indah Ulu Tiram (283.3ha), Taman Kempas Indah (95.9ha) and KSL City (2.73ha).

Upon completion in eight to 10 years, there will be 18,300 mixed residential and commercial properties worth a total gross development value of RM3.7bil.

“These projects will contribute up to 70% of group revenue and earnings in the current financial year ending Dec 31.

“Despite the sceptical views by certain quarters on the progress and benefits of Iskandar Malaysia, we are confident that the corridor has great potential, going forward,” executive director Ku Hwa Seng told StarBiz.

Iskandar Malaysia, formerly known as Iskandar Development Region before the name change in April, would be two years old in November.

The growth corridor covers 2,216.3 sq km within the southern-most part of Johor covering Johor Baru city centre, Nusajaya, Pontian-Gelang Patah, Senai-Kulai-Skudai and Pasir Gudang-Tanjung Langsat.

Ku commended Khazanah Nasional Bhd for having done a good job in promoting the growth corridor locally and internationally.

Iskandar Region Development Authority has secured RM33bil investment, representing 70% of the total investment target of RM47bil for the period between 2006 and 2010.

“KSL’s projects will be one of the main beneficiaries of the spillover effect of Iskandar Malaysia and Singapore,” he noted.

He said KSL would benefit from Iskandar Malaysia in view of the company’s niche market and strong brand in the Johor property scene.

As of last December, KSL has over 809.371ha of landbank in Johor Baru, Batu Pahat, Kluang, Segamat, Mersing and Muar. Of the total landbank, 60% are located within Iskandar Malaysia.

Ku said the land’s close proximity to the Senai Airport, the Port of Tanjung Pelepas, North-South Expressway and the Senai-Desaru Highway was a boon for the company.

The airport, the port and the highways are touted to be interlinked and will be developed into part of the transportation hub in Iskandar Malaysia.

About 80% of the land are available for immediate development as they have been granted approval for subdivision.

Together with the Maharani Riviera in Muar, the company’s projects in Johor have a combined gross development value of RM4.4bil, which will keep it busy for the next eight to 10 years.

Taman Nusa Bestari benefits the most, as the scheme is located just a few kilometers from Nusajaya where the Johor State New Administrative Centre is being built.

Nusajaya and its nearby areas are in for a boom as many development projects are being built and new ones in the pipeline.

Ku said when the company launched its three-storey shop offices in Taman Nusa Bestari in 2002, they were priced around RM300,000.

“Now, we are selling a similar unit at RM800,000 to RM1mil while the bigger units are priced at more than RM2mil,” he said.

Besides its traditional market in Johor, KSL is also looking to expand into the Klang Valley with the recent purchase of two parcels of land totalling 180.6ha in Klang, Selangor, for RM156mil.

The land is located along Jalan Klang-Banting within the Blackwater Estate about 15km from Klang town centre.

Ku said the company planned to develop its land in Klang into a mixed project with a gross development value of RM1.5bil. The project is targeted for launch early next year and will take eight years to complete.

Ku said the acquisition served as a platform for the company to tap into the Klang Valley property market.

“Our land in Johor and Selangor will help us sustain our medium to long-term growth and profitability,”he said.

On how KSL, being a Johor-based developer, could convince house buyers in the Klang Valley, Ku said: “Regardless where they are, purchasers are more or less the same.

“If you give them better quality products and good facilities, they will consider buying from you,” he said.

By The Star - StarBiz - (by Zazali Musa)

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