Friday 29 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on August 30, 2021 - September 5, 2021

For the longest time, Ekovest Bhd was touted as playing a role in Bandar Malaysia, the country’s most prestigious but most capital-absorbing property development project.

Bandar Malaysia was also supposed to be the launching pad for the eventual listing of Iskandar Waterfront Holdings Sdn Bhd (IWH), the private company of 

Tan Sri Lim Kang Hoo, who controls Ekovest.

IWH’s partner in the Bandar Malaysia development, valued at RM140 billion, is China Railway Engineering Co (CREC). Ekovest was to take up an effective 12% stake in the development for an estimated RM1.48 billion.

But the joint venture pulled out of the project, citing the prolonged Covid-19 pandemic.

In hindsight, it saved Ekovest cash, which it is now utilising for its maiden property development in Singapore. Towards this end, the company is providing financial assistance amounting to S$77.5 million (RM240 million) to a joint venture in Singapore in which it holds 29%. The financial assistance is its portion of undertaking for a S$487 million (RM1.5 billion) development.

The Bandar Malaysia development may dwarf the Singapore project in size, but Ekovest will surely see a faster turnaround of its capital in the Singapore project compared to the former.

Singapore’s property market is more vibrant than Kuala Lumpur’s. The Bandar Malaysia development is more than 486 acres, has a long gestation period and requires heavy capital outlay before returns can be reaped.

It is ideal for firms such as IWH, which is effectively a land-banking company that develops its assets over time through joint ventures. Without Bandar Malaysia, IWH’s assets are now in Johor Baru, where there is a huge property overhang.

For a listing, IWH is better off participating in projects in Singapore, like its indirect subsidiary, Ekovest.

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