- The Star reported that China’s Country Garden Holdings Ltd is targeting buyers from cities in the country’s southern region for its Country Garden Danga Bay project. This would come from cities such as Fuzhou, Guangzhou, Nanning and Shenzhen.The project was unveiled yesterday with its official launch slated for August 11, although marketing efforts had started since April this year in China. Similarly, Country Garden had been bringing batches of potential Chinese investors to visit its Danga Bay project site.

- The project consists of 9,000 condominium units with commercial components such as a shopping mall and boulevard. The indicative GDV is RM18bil over three phases that will be launched simultaneously. The entire project will be completed in 2017.

- Country Garden first purchased the 57-acre sea-fronting land in Danga Bay for RM900mil or ~RM376psf from Iskandar Waterfront Holdings (IWH) late last year. This was the highest transacted land sale on record thus far within the Danga Bay area.

- We understand that the project is fetching ~RM700psf for the residential units. Country Garden expects 50% of its customers to come from China and Singapore, with Malaysians contributing the balance. Our channel checks indicate that over 4,000 units had already been booked prior to its launch.

- The strong response to Country Garden Danga Bay validates our growing conviction of the rising appeal of Danga Bay – along with the Tebrau/Plentong area - as a prime waterfront destination within the JB city centre.

- More importantly, the increasing presence of Chinese buyers with huge liquidity provides broadening incremental demand for properties in Iskandar Malaysia. This is timely in view of the recent slew of tightening moves on the Chinese property market.

- In a related development, Medini Iskandar Malaysia Sdn Bhd is reportedly planning to list on Bursa Malaysia in the 1H of 2014. The deal could raise up to US$800mil (RM2.6bil). While it is still in the early days, we gather that several bankers are already pitching for the deal.

- Medini Iskandar’s current stakeholders include state-backed Iskandar Investment Bhd (IIB), Dubai’s United World Infrastructure and Japan’s Mitsui & Co Ltd. As for IIB’s shareholders, Khazanah Nasional holds a 60% stake with the balance 40% equally split between EPF and Kumpulan Prasarana Rakyat Johor (KPRJ). Together with partners, Medini Iskandar is currently developing ~2,231 acres of land within the Medini that is the single-largest urban development to-date in Iskandar Malaysia.

- The planned listing comes at the time where the development cycle within Medini is fast gaining traction; underpinned by rising property prices, land values. Newsflow momentum on the sector would be further underpinned by the imminent debut of two other mega property IPOs in the pipeline; i.e. Iskandar Waterfront Holdings (IWH) and IOI Properties.

- We maintain our OVERWEIGHT stance on the property sector. Our preferred picks are Mah Sing, IJM Land and UEM Sunrise.  

Source: AmeSecurities