Initially, BSEL, which is also listed on Luxembourg Stock Exchange, will invest Rs 2,500 crore to build residential and commercial buildings and double the investment it made from the sale of properties in the next four years.
The company will develop a total of 70 million sq ft of space in the next 12 years in Johar Bharu region of Malaysia , BSEL Managing Director Dharmendra Raichura told Business Standard .
Raichura said BSEL would form a new company in Malaysia to execute the project and make that as a subsidiary of either Indian company or its UAE subsidiary, BSEL Infrastructure Realty FZE. He said the company would pump in funds from the sale of its UAE properties to finance the Malaysian project.
BSEL Infrastructure Realty FZE, which executes BSEL's realty projects in UAE, has 4 million sq ft of space under construction in the West Asia and made a topline of Rs 300 crore for the financial year 2007-08 and expecting nearly Rs 800 crore-Rs 900 crore revenues from UAE operations in the current financial year.
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BSEL has nearly 10 million sq ft of area under development in India with a saleable value of Rs 3600 crore.
"Johar Bharu is very close to Singapore and authority has plans to transform Johar Bharu as the next Singapore in the coming 5 to 7 years. The area has a huge potential for growth,'' Raichura said.
Property prices in Johar Baru, a 25-minute drive from Central Singapore, are one-twenty fifth of that in Singapore.
"We are expecting 35-40 per cent returns from the project and if the property market grows much faster, the return will be much higher,'' he said.
Developers in Johar Baru get tax holiday on land sales and premises sales till 2015 and exemption on rental income till 2020. BSEL will get benefitted from this exemption, Raichura added.