The principal developer of Iskandar Malaysia, UEM Sunrise Bhd, has ceased its plan to build one of the region's major projects.
Singapore's The Straits Times reported today that no reason was given for the decision to halt plans to build the huge Asian Trade Centre (ATC) in Iskandar, Johor.
The newspaper noted that this would likely intensify concerns that the fast-growing region is hitting some "speed bumps".
The move has stunned property experts, especially since UEM Sunrise managing director and chief executive Anwar Syahrin Abdul Ajib was quoted in a New Straits Times report last December as saying the company was "in the midst of getting approvals from the relevant authorities" for the project.
A property consultant noted the first phase of the centre's development, the China Mall, was supposed to be a catalyst - a mall "even larger than Pavilion in Kuala Lumpur", and meant to attract foreign investors.
'Further worries in the property market'
"Cancelling it is not good for business. Others may have made plans based on the announcement," the consultant said.
Others in the industry said the decision to drop such a large facility would create further worry in the Iskandar property market, which is already weakened by oversupply concerns in the residential sector.
ATC-China Mall was to be akin to the Dragon Mart in Dubai that Chinamall Holdings opened in 2004.
Anwar Syahrin said last December that UEM Sunrise was building the trade centre because it believed Malaysian products were not being marketed properly.
"We want international and local manufacturers to showcase their products and do trade shows at the ATC. We are tying up with Chinamall Holdings Pte Ltd from China,” he was quoted as saying in the New Straits Times report.
The 1.4 million sq-ft mall, worth more than RM600 million, was supposed to house more than 3,000 merchants offering products such as textiles, gifts, souvenirs, electrical and household appliances, furniture, toys and jewellery.
The ATC is in the Nusajaya area, about a five-minute drive from the Johor Baru checkpoint at the Second Link with Singapore.
It was to have been part of the 1,840ha Gerbang Nusajaya, the site of the second development phase of Nusajaya city. The area includes Puteri Harbour and the upcoming Nusajaya Tech Park and Motorsports City.
UEM Sunrise had signed a memorandum of understanding with Chinamall Holdings in late 2012 to develop the China Mall.
According to its website, Chinamall Holdings, which is incorporated in Singapore, is a building materials trader and constructs and operates specialised wholesale markets.
The deal was for UEM Sunrise to own the mall, with Chinamall Holdings managing and marketing it on a long-term lease.