Confidence in Iskandar project despite delays

An artist's impression of Vantage Bay, the delayed integrated development project handled by Rowsley, in Iskandar Malaysia.
An artist's impression of Vantage Bay, the delayed integrated development project handled by Rowsley, in Iskandar Malaysia.PHOTO: BEST BLEND

Rowsley will be patient with the progress of its Vantage Bay project in Iskandar Malaysia despite weaker demand there, chief executive Lock Wai Han said yesterday.

The Singapore-listed firm's Vantage Bay - an integrated development project - has hit a snag after it was first proposed in 2012, becoming one of several Iskandar projects to face constant delays, owing partly to real estate oversupply in the special economic zone.

But Rowsley is still confident about the project's outlook, Mr Lock told The Straits Times during a visit to Manchester to announce investments there.

"At the time when we went in (to Iskandar), it was clearly the right decision. But market risks and policy risks cannot be fully predicted. The market has changed, but we still believe in the long-term potential of Johor and Malaysia."

He added that Rowsley will not run into similar issues with its new ventures in Manchester, including a city centre mixed-use development called St Michael's .

"If you're suggesting that Manchester is as risky as Iskandar-no, I don't think so. Things are a lot more stable here, and rules are more predictable. With St Michael's quality and city centre location, I have no doubt the units will be snapped up in no time," he said

Earlier this month, Rowsley reported a 92 per cent slump in second-quarter net profit as the real estate and architecture company remained under pressure of a soft property market in Singapore, not helped by the delay in Iskandar.

The challenging conditions have led the company to seek new sources of recurring income and profits. Earlier this month, Rowsley announced a $20.6 million investment in a 34.72 per cent stake in India's RSP Design Consultants.

Meanwhile, Mr Lock said Rowsley can afford to wait for market conditions in Iskandar to improve before launching Vantage Bay.

"Looking at where Vantage Bay is and what product it's offering, I'm actually very confident that there's no oversupply concern, whatever number of units some foreign developers churn out."

He added: "Then, there's the matter of when we enter the market. From my perspective, in terms of timing, we can afford to wait. The land is freehold, and we don't owe the banks any money."

Wong Wei Han

A version of this article appeared in the print edition of The Straits Times on August 28, 2015, with the headline 'Confidence in Iskandar project despite delays'. Print Edition | Subscribe