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Categories
| SunCity in RM2.5b Tianjin eco-city partnership |
| Business & Market 2009 | |||
| Written by Melody Song | |||
| Wednesday, 28 October 2009 11:20 | |||
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SunCity and SSTEC signed a memorandum of understanding (MoU) yesterday to conduct a six-month market research, feasibility study and proposed business plan, after which SunCity will take on the leading role as SSTEC co-developer. SSTEC is the master developer for the Tianjin Eco-City. “This will be SunCity’s biggest project in China. It is driven by the governments of China and Singapore,” said Sunway Group chairman Tan Sri Dr Jeffrey Cheah, adding that the feasibility study must be done before a definitive agreement was signed. SunCity property and investment senior general manager Ong Pang Yen said it was not necessarily a question of feasibility but how the project could be made feasible. “There is a good selection of developers (involved in the SSTEC project) and it will happen,” said Cheah. He said the project would be funded by real estate investment trusts (REITs) in the near future. “SunCity’s role will be to create a master plan as well as implement and drive the project,” he said. SSTEC has partnerships with five other international developers to develop its 30 sq km (322.9 million sq ft) of non-arable land in Tianjin, a manufacturing hub and deepwater port city of 11 million people located about half an hour away from Beijing by bullet train. The international developers working on the project include China’s Shimao Group, Japan’s Mitsui Fudosan, Taiwan’s Farglory Group and Singapore’s Keppel Land. There are also smaller parcels of land that will be developed by independent property developers. SSTEC chief executive office Goh Chye Boon, who is also the deputy secretary (special projects) of the Singaporean Ministry of Trade and Industry, said SSTEC had approached SunCity some time ago for this potential joint-venture based on the latter’s track record in environmentally-friendly development. Goh added that a new management team and company would be set up by SSTEC and SunCity sometime in 2011 to work out market demands for the area.  Tentatively, the project would comprise 88% residential property and 12% commercial property, including an integrated business centre. “We are excited over our participation in this project because our expansion into overseas markets provides opportunities for new revenue sources and allows the company to achieve sustainable growth,” said Cheah. He said the project would contribute to SunCity’s earnings beyond 2011. According to Goh, the groundbreaking for the entire SSTEC project was due this month and sales of the first batch of property would begin during China’s week-long national day holiday in October 2010. “This is the first project of its kind in China and will aim to help provide a solution to urbanisation problems,” he said. Tianjin Eco-City is a 50:50 joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Co and a Singapore consortium led by the Keppel Group, as part of a bilateral project between China and Singapore with a start-up area spanning four sq km (43 million sq ft). Envisaged to be a large-scale commercially viable city-in-garden development housing 350,000 residents, it aims to adopt green technology in its buildings, transportation systems and waste management. Meanwhile, Cheah said Sunway Holdings Bhd, a subsidiary of Sunway Group, would dip into its cash reserves to fund its third joint-venture project with Singapore-based Hoi Hup Realty Pte Ltd. Cheah said the company had enough funds to proceed with the proposed 400 to 500-unit condo project there. “Sunway will have a 30% stake in the venture,” he said, adding the two companies had been partners for many years. Sunway is the supplier of precast concrete forms to Hoi Hup. The project, which has a gross development value of S$435 million (RM1.1 billion), would cover an area of 207,000 sq ft at Jalan Senang and Lengkong Tujoh off Sims Avenue in Singapore. According to a research note by Maybank Investment Bank, the acquisition still needed the approval of Singapore’s land authority. The target for the launch is beyond 2010. This article appeared in The Edge Financial Daily, October 28, 2009.
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