Singapore-listed GSH Corp Ltd is venturing further into real estate development in Malaysia, with the acquisition of a major stake in Sutera Harbour Resort and two parcels of residential land in Sutera Harbour, Kota Kinabalu, Sabah. One of Sabah's premier resorts is beginning the new year with a change of ownership after China property developer GSH Corp Ltd has acquired a 77.5% stake in Sutera Harbour Group Sdn Bhd for approximately RM700 million, the owner and operator of the Sutera Harbour Resort here.

The acquisition will see Borneo Ventures injecting RM250 million in exchange for about 1.03 million new shares in The Sutera Harbour Group.

GSH, through two of its wholly-owned subsidiaries Ocean View Ventures Pte Ltd and Ocean View Point Pte Ltd, is also acquiring two separate land parcels totalling nearly 10ha within the 154ha Sutera Harbour property for future luxury condominium development. Borneo Ventures will also subscribe to 260,000 new cumulative redeemable preference shares (CRPS) and TYJ Group 190,000 CRPS issued by the Sutera Harbour Group at a subscription price of RM260 million and RM190 million, respectively. The CRPS bear a coupon of 10% per year.

Through its wholly-owned subsidiaries Ocean View Ventures Pte Ltd and Ocean ViewPoint Pte Ltd, GSH has also agreed to acquire stakes in two separate parcels of land measuring 12.1 acres (4.9ha) and 13.11 acres within the 384-acre Sutera Harbour property.

The main board Singapore Exchange listed GSH is a property development company with interests in China and Malaysia and is headed by Sam Goi who is listed by Forbes as 11th richest in Singapore and well known as the popiah king, the executive chairman of Tee Yih Jia Group.

Tee Yih Jia is a global food and beverage group with operations in Singapore, Malaysia, the United States, Europe and China. "Kota Kinabalu is a rising property hotspot in Malaysia and we see robust potential for prime real estate in the city, fuelled by strong tourism growth from South Korea, Japan, Hong Kong and China" said GSH chief executive Gilbert Ee yesterday.

"The number of visitors from these countries is growing exponentially and accounts for more than half of total international arrivals to Sabah, with more than a third of them from Hong Kong and China" he said.

"Apart from tourism, the Sabah has experienced strong gross domestic product growth in 2012, thanks to its key sectors of agriculture and oil and gas. With such strong fundamentals, we see great potential in Kota Kinabalu's luxury hospitality sector as well as premier resort homes.” Ee added. He said Sutera Harbour and its surrounding properties were positioned to benefit from this growth.

"Its location is within 10 minutes from the city and yet provides a quiet, exclusive and secure ocean-front property with spectacular scenery. "This is a rare find anywhere in Asia and we are excited at the opportunities that this property will bring to GSH" Ee added.

Sutera Harbour Resort group president Datuk Edward Ong Han Nam, the founder and developer of Sutera Harbour, said he was excited with the deal as it would propel the resort to the next level of tourism development in Sabah.

On Nov 29 last year, GSH announced that its wholly-owned subsidiary City View Ventures Sdn Bhd had signed a sales and purchase agreement (SPA) with Tropicana Kia Peng Sdn Bhd to acquire a parcel of prime land in Kuala Lumpur for a purchase consideration of RM132.4 million.

In its press statement, GSH stated that it plans to develop the 5,800 sq m (0.58ha) leasehold tract located in Jalan Kia Peng into a residential and commercial project.

GSH shareholders approved the acquisition in an extraordinary general meeting on Oct 9 last year, as part of the group's move to diversify into property development and related businesses in Asean countries.

On July 18 last year, GSH announced that it had entered into a MoU with Gabungan Granite (Terengganu) Sdn Bhd (GGT) to acquire its shares in the company. GSH was eyeing the development of a site of approximately 7.1 acres in Kuala Lumpur, which GGT has the rights to develop.

However, it was stated that at this preliminary stage, shareholders should be cautioned that there is no assurance that a SPA will be entered into.

GSH's ventures into property in Malaysia follow a similar move by Singapore-listed Albedo Ltd. In September, Albedo agreed to a S$774 million takeover by a private company controlled by Tan Sri Danny Tan, the founder and group executive vice-chairman of Tropicana Corp Bhd. Tan injected seven parcels of land in Johor's Iskandar Malaysia valued at RM2.7 billion.

GSH stock closed at 8.7 Singapore cents yesterday, a nine-month high, for a market capitalisation of S$860 million.