This article first appeared in City & Country, The Edge Malaysia Weekly on December 2, 2024 - December 8, 2024

Situated on 116 acres of reclaimed land at the southern tip of Tanjung Puteri in Johor Bahru, Johor, and directly across the Straits of Johor from Singapore is the R&F Princess Cove development by China-based property developer R&F Group. The project boasts a gross development value of RM40 billion.

Living up to its tagline “The Exit to Singapore”, the development is located 650m from the Johor Bahru Customs, Immigration and Quarantine (CIQ) complex via a covered pedestrian bridge.

“We are just 1km away from Singapore. You can literally swim across the border,” quips R&F Development Sdn Bhd (R&F Group Malaysia) deputy general manager Xu Jie in an exclusive interview with City & Country.

R&F Group Malaysia is a wholly-owned subsidiary of China-based R&F Group. 

“Our buyers can have the best of both worlds, and this is why our project has been very well received even during the pandemic. Our first phase has recorded a price appreciation rate of more than 30% despite the pandemic,” Xu says.

Officially launched in 2014, R&F Princess Cove is a mixed-use development on two parcels of reclaimed land separated by the Johor-Singapore Causeway.

While plans for the smaller west parcel are still being finalised, the east parcel is already home to Johor’s first opera house, a 1.8km marina garden seaside promenade, a marina boulevard (retail), a luxury clubhouse and yacht club, and the R&F Mall Johor Bahru. The east parcel will also include an international-standard five-star hotel, a Grade-A office tower and five phases of high-rise residential towers.

The mall has been open to the public since early 2019. With a gross floor area of 800,000 sq ft and a net lettable area of 532,000 sq ft, the 3-storey property is connected to the CIQ via the 650m direct link bridge.

The Permaisuri Zarith Sofiah Opera House was officially launched in 2020 during the China-Malaysia Year of Culture and Tourism and has been operational since. The 114,430 sq ft opera house can seat about 500.

The marina garden seaside promenade, marina boulevard, luxury clubhouse and yacht club have been operational since completion in 2022. The 100-yacht capacity marina currently accommodates about 20 yachts. The largest vessel, a 69ft yacht owned by R&F Malaysia, is available for buyers of R&F Princess Cove properties to rent as a common facility.

The first residential phase, R&F Princess Cove Phase 1, comprising a total of 3,472 apartment units, was fully sold and handed over to buyers in 2017. The occupancy rate at these apartments is 95%.

The second residential phase, Seine Region, comprising 3,724 apartment units, has been handed over to buyers in phases since April this year. Some 1,700 units had been delivered as at October and the average occupancy rate is 30%.

“We have reserved some of the best of the best units in phase two for sale after its completion. They are poised to break the highest residential transaction price psf record in Johor Bahru,” says Xu, adding that the average selling price is above RM2,000 psf. 

“We will not be surprised, however, if the price goes up to RM3,000 psf because these units are very exclusive and rare in the market.

“They enjoy unobstructed views of the sea and Singapore skyline. Most are located on a high floor, have bigger built-ups and are carefully curated for the affluent and high-net-worth buyers.”

Xu is confident that these units will be highly sought after and transacted at record prices in the Johor Bahru residential market, on par with some of the highest-priced residential properties in KL city centre and Penang.

“We are benchmarking against international luxury residential standards, with high-quality furnishing and features. We chose the top brands for our semi-furnished units,” Xu says.

According to him, the mixed-use development has evolved into a tourist destination, cultural centre and sought-after address for Malaysians and Singaporeans. Its appeal lies in its strategic location, well-designed master plan, promising prospects for both local and international investors, and position as the gateway between Malaysia and Singapore.

“With all these elements and components coming together in one project, we believe that our forecast [that residential transacted prices will hit RM3,000 psf] is justified and achievable. In addition, there are more catalysts ahead, including the announcement of the Johor-Singapore Special Economic Zone and the upcoming Johor Bahru-Singapore Rapid Transit System (RTS), with the Bukit Chagar RTS Station a stone’s throw from our project site.”

In September, the developer opened the third residential phase of R&F Princess Cove, New Casa Suites, for registration of interest.

The latest phase offers a total of 4,385 serviced apartments, with built-ups ranging from 313 to 1,555 sq ft and an estimated average selling price of RM1,000 psf. The project is set for official launch in 1Q2025.

“We are fine-tuning some details, but the market can expect a wider range of layouts in New Casa Suites catering for local and international homebuyers,” Xu says. “Post-pandemic, we noticed a shift in buyers’ mindset. Previously, they may have seen this project as a golden investment opportunity. Now, as more components are completed and more shops have opened, they realise that it can be an ideal place for a home.”

The 313 sq ft studios and 3,874 sq ft 2-storey penthouses at New Casa Suites are designed to meet demand from buyers ranging from first-timers to larger families.

“The apartments in the first and second phases were designed for investors — the smaller units for tenants who cross the border daily and the bigger units for the use of expatriates or foreigners as holiday homes,” Xu says.

“As this development gains more traction and most of the apartments in the first phase are occupied, people have started to realise that R&F Princess Cove is more than just an investment asset but also ideal for living in because the development is self-sustaining and in a prime location.”

Because the developer has received enquiries about the smaller units and feedback for the bigger, family units for families, it decided to offer wider layout options in phase three.

“The 313 sq ft, semi-furnished unit is suitable for young individuals and couples. The layout is practical and the price is very affordable for such a choice location; and the penthouses are designed for families. We are providing more family-friendly facilities in phase three, such as a 50m swimming pool, a children’s activity area and a covered jogging track.”

Other facilities included in New Casa Suites are tennis and basketball courts, billiard rooms, table tennis rooms, a mini golf area, indoor badminton courts, a gym, yoga room, multifunctional room, sauna and Jacuzzi, an outdoor playground and a covered link bridge to the R&F Mall Johor Bahru.

According to Xu, New Casa Suites attracted more than 300 prospective buyers, both local and international, who attended the one-day exclusive preview in September. Ninety per cent were from Malaysia and Singapore, and the rest were from Asian countries such as China, Taiwan and Indonesia. Some even expressed an interest in purchasing more than one unit.

Apart from launching the New Casa Suites, the developer is carrying out upgrading works at the opera house, clubhouse and yacht club. It is also in the midst of enhancing the tenant mix at the R&F Mall Johor Bahru and the marina boulevard with the introduction of new brands.

“We are positioning the R&F Mall as a mid-range to high-end offering, focusing on services such as beauty clinics, nail bars and hair salons. Meanwhile, we are also in discussion with potential brands, including F&B, for the mall and retail boulevard. Our goal is to have 15 to 30 new shops opening at R&F Princess Cove every month until all the lots are tenanted,” Xu says.

Meanwhile, the developer plans to launch the fourth residential phase over the next 24 to 30 months, to coincide with the completion of the Bukit Chagar RTS station. “The fourth phase is still on the drawing board but we will continue to highlight the seaview units. We are also looking to include an infinity pool and rooftop bar in the project,” says Xu.

On top of the five residential phases planned for the eastern land parcel of the development, there will be two other residential phases in the western land parcel, Xu reveals.

“The master plan for the parcel in the west has yet to be finalised. We are building a driving range on that parcel, which will be completed in 2025. The remaining undeveloped land there is being used for parking lots and occasionally for events such as bazaars and festivals.”

The entire development will take 15 to 20 years to complete, he says, depending on external and internal economic conditions as well as market response.

Despite the challenges that property developers are facing in China, where R&F Group is based, its Malaysian business is going strong, according to Xu.

“I am not going to lie that the tension back in the China market did not raise some buyers’ concerns here but, as far as we are concerned, our sales have been increasing steadily every month and our project construction and infrastructure upgrading works are progressing well and efficiently.

“Let’s put it this way; if we have problems with cash flow and can’t pay the main contractor or suppliers on time, it will not be possible for our construction progress and upgrading work to be well on track. In fact, the Malaysia team requires very minimal resources from our HQ, as our business here is self-sustaining and growing organically.”

China’s property development industry is facing a significant crisis characterised by excessive debt, which has led to defaults and financial instability among many major developers, including R&F Group, the holding company of R&F Group Malaysia.

The stricter government regulations in China have further complicated matters, while declining demand for new housing — due to rising interest rates and reduced consumer confidence — has resulted in a surplus of unsold properties, driving down prices and profitability in China. In addition, unfinished projects and delays in home deliveries have fuelled public frustration and raised concerns about social stability.

As a leading property developer in China, R&F Group has been significantly affected by the ongoing crisis. The company has faced financial challenges because of its substantial debt load and declining sales. In response to the crisis, the group reacted quickly by implementing measures to stabilise its operations, including restructuring debt and selling non-core assets in China and other countries such as the UK.

The company is focusing on completing its high-potential existing projects, including R&F Princess Cove, to rebuild buyer confidence and maintain its reputation.

R&F Group Malaysia will continue to focus on its maiden development in the country.

Xu says: “My predecessors have done a very good job in securing such a precious parcel [of land] in this part of Johor. And it has an unbeatable selling point that differentiates us from competitors in the region even in the current highly competitive market condition. We cannot afford to have this project fail and we will continue to focus and allocate most of our resources in making R&F Princess Cove successful.”

He is optimistic about Johor’s property market because it is backed by catalysts such as the enhancement of inter- and intra-state connectivity; the increase in Singapore’s Additional Buyer’s Stamp Duty (ABSD) to 65%, from 30%; the fact that the king of Malaysia is Johor’s Sultan Ibrahim Sultan Iskandar; the relaxation of requirements for the Malaysia My Second Home (MM2H) campaign; and encouraging foreign direct investment.

“We believe the future of Johor is bright. What we need to do now is stay focused on completing our project and provide only the best to our customers and investors. If we are going to expand our footprint in Malaysia one day, we will most likely continue to focus on Johor and grow bigger and stronger before exploring opportunities in other states,” he says.

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