KUALA LUMPUR: Sunway Bhd is entering into a joint venture (JV) with Iskandar Investment Bhd (IIB) to undertake a mixed development project in Pendas worth RM12 billion in gross development value (GDV).

Harmony Impulse Sdn Bhd (HISB), a 60:40 JV vehicle owned by Sunway and IIB, has agreed to purchase two parcels of land from IIB — a 412.75-acre plot in Mukim of Pulai called Pendas North Land valued at RM221.28 million and a 366.32-acre plot in Mukim of Tanjung Kupang called Western Pendas South Land, for RM191.45 million.

The total cost for the two parcels of land is RM412.73 million, or at about RM12.16 per sq ft, which Sunway said is attractive.

“The development is expected to generate an estimated GDV of RM12 billion over 17 years,” said the company in a filing with Bursa Malaysia yesterday.

With the acquisition, Sunway’s landbank in Iskandar Malaysia will increase to 1,558 acres, propelling the company towards becoming one of the largest land owners in the high growth region, it said.

“This sizeable landbank is located next to the existing Medini Zone F leased to Sunway Iskandar Sdn Bhd by IIB commencing Sept 1, 2012. It is expected to generate substantial synergies with Sunway’s proposed development there as well as create the potential for an even larger and more integrated township development.”

IIB, which is a 60% subsidiary of Khazanah Nasional Bhd, is the master developer for Iskandar Malaysia. Sunway believes that its partnership with IIB will enhance the profile of its integrated development in Iskandar and draw greater foreign interest.
The Sunway group aims to further strengthen its foothold in Johor based on the growing potential in the region from both local and foreign investors.

“As at the first half of 2012, Iskandar Malaysia had secured RM10.67 billion of new committed investment, bringing the total cumulative committed investment in Iskandar from 2006 until end-June 2012 to RM95.45 billion,” it said.

According to Sunway, interest in the region is expected to develop further hinged on recently completed projects like Legoland and Puteri Harbour Indoor Theme Park, Newcastle University and Marlborough College in EduCity, as well as transportation improvements via the Coastal Highway connecting Johor Baru to Nusajaya and the planned Southern Link.

This article first appeared in The Edge Financial Daily, on Dec 5, 2012.