IDR draws US$1.2 billion investment from Middle East

IDR draws US$1.2 billion investment from Middle East

PUTRAJAYA: A group of Middle East investors inked pacts Wednesday to plow US$1.2 billion (euro880 million) into a new Malaysian economic hub, marking the first major foreign investment in the project.

The Iskandar Development Region, or IDR, in southern Johor state bordering Singapore was launched in November as a new regional growth center to woo foreign investors amid stiff competition from China and India.

Abu Dhabi state investment agency Mubadala Development Co., Kuwait Finance House and Dubai-based property developer Saraya Holdings Ltd. agreed to develop a total 2,230 acres (902 hectares) in the IDR, said state agency South Johor Investment Corp. or SJIC.

SJIC chairman Azman Mokhtar hailed the partnerships as a key catalyst to kickstart growth in the IDR zone.

Three times larger than neighboring Singapore, the zone is a major part of the government's plan to become a developed nation by 2020.

"This is a historic and strategic landmark transaction between our two regions,'' Azman said at the signing ceremony, adding that the total investment marked the single largest foreign property development in Malaysia.

The government targets an investment of US$105 billion (euro80 billion) over 20 years to develop the IDR, sprawled over 221,634 hectares (547,657 acres), into a regional business, entertainment and leisure hub.

"We are looking long term...there is tremendous potential (in Asia),'' said Mubadala Chief Executive Khaldoon Khalifa Al Mubarak.

"This will be a flagship development for the region, not just for Malaysia.''

Under the pact, Mubadala will invest US$520 million (euro380 million) to develop the lifestyle and leisure parcel comprising a golf village, an amusement bay, residential district and a medical center, SJIC said in a statement.

Al Nibras 2 Ltd., a fund managed by Kuwait Finance House, will put in US$330 million (euro241 million) to build a cultural village, it said.

Millennium International Dev. Co., a unit of Saraya, will invest US$325 million (euro237 million) in a financial hub to serve markets in Asia and for Islamic banking services, it said.

SJIC will hold 30 percent equity in the venture with each of the three groups, which are expected to make "further development investments of several multiples'' over their initial investment over a 20-year period, it added. - AP