PETALING JAYA: From a joint Malaysian-Chinese consortium, it is looking likely that a sole China conglomerate could be the new master developer for Bandar Malaysia in Kuala Lumpur, The Straits Times reported.
After the collapse of the deal between TRX City Sdn Bhd and a joint venture comprising Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC), speculation is rife over who is going to be the new master developer for the lucrative property development project.
Dalian Wanda Group, under China’s richest man Wang Jianlin, is said to be in an advanced stage of negotiations with the Malaysian government for a majority stake in Bandar Malaysia. As yet, no Malaysian company has been named to join Wanda Group in its bid.
According to the Singapore-based daily, senior executives from Wanda Group had met with Prime Minister Najib Razak during his official trip to China last November.
“Both Wanda Group and China’s Greenland property group indicated interest in participating in the Bandar Malaysia project but Wanda was always the more aggressive party in showing their interest,” ST quoted government officials as saying.
On May 3, TRX City Sdn Bhd, which is owned by the finance ministry, said the agreement signed in 2015 with IWH-CREC had lapsed because the buyers “failed to meet the payment obligations”. TRX City Sdn Bhd was previously known as 1MDB Real Estate Sdn Bhd.
IWH-CREC disputed the reasons given by TRX City, saying it was reviewing the content of the termination notice and press release by TRX City with its advisers and legal counsel.
With the government pulling the plug on the deal, IWH-CREC are no longer the master developers of the RM200 billion Bandar Malaysia project. The deal involved IWH-CREC paying US$1.7 billion (RM7.3 billion) for 60% of the major Kuala Lumpur property development project.
Wanda Group is now the front-runner to take over. However, it is still awaiting approval from China’s financial regulators, especially in view of the large outflows of capital expected to follow such a purchase, something that the Chinese government is trying to curtail.
Wang, who also met with Najib last November, is said to be interested in Bandar Malaysia after Wanda Group abandoned its planned acquisition of Hollywood’s Dick Clark Productions for US$1 billion, owing to China’s stringent controls on the outflow of capital.
According to ST, should the Chinese government approve the deal, an agreement is likely to be signed between Wanda Group and TRX City in Beijing later this week, in the presence of Najib, who will be one of 28 heads of states attending the Belt and Road for International Cooperation Forum on May 14-15.
Bandar Malaysia is located on land that was previously the base for the Royal Malaysian Air Force (RMAF). Apart from its major property development scope, Bandar Malaysia is also expected to be a transport hub, anchored with the main station for the high-speed rail (HSR) project linking Kuala Lumpur and Singapore.
The Wanda Group boasts the world’s largest cinema chain, theme parks, hotels and even football clubs in its stable of businesses.
Not surprisingly, the government officials and financial executives familiar with the talks between TRX City and Wanda Group said that the latter will push for entertainment-related ventures taking up half the project site.
According to an official, that was a key attraction for Malaysia’s interest in partnering with Wanda, which is said to want to build an iconic cultural and entertainment platform in Bandar Malaysia.
Government officials told ST that any new deal would value Bandar Malaysia substantially higher than its previous RM12.3 billion estimation, but no figures were forthcoming.
As of yesterday, no Malaysian company were said to be a party to any new talks for a stake in Bandar Malaysia. Local property developer Malton denied reports linking them to a joint bid that also includes a retirement fund and Wanda.