Thursday, September 26, 2013

F1-quality racetrack coming up in JB

Peter Lim's project could pose competition for S'pore and Sepang circuits

The Straits Times - September 26, 2013
By: Christopher Tan

SINGAPORE tycoon Peter Lim's planned race circuit in Iskandar is revving up to be more than just a playground for the fast and furious. It could potentially rival Singapore and Sepang as a Formula One venue.

FASTrack Autosports, a venture between Mr Lim and the Johor royal family, which is undertaking the project, has decided to build an F1T-grade facility. F1T stands for Formula One Test.

It was slated as a Grade 2 track - for all races except F1 - when the project was first announced last year.

FASTrack chief executive Barry Kan said the company decided to upgrade to F1T when it found that it cost only about 10 per cent more to do so.

At a cost of just under $100 million, the track is part of a $1.4 billion motorsports hub project undertaken by FASTrack and Malaysian state-owned real estate company UEM Land.

On whether it will compete with Singapore and Sepang as a future F1 venue, Mr Kan said the circuit will have all the technical requirements necessary for Formula One races.

"F1 teams can test their cars here, but whether a circuit is an F1 track depends on one man," he said, referring to F1 czar Bernie Ecclestone.

Compared to a Grade 2 track, the 4.5km F1T circuit will have gentler gradients, wider run-off areas, stronger barriers, and a long straight stretching over 1km that will allow cars to breach 300kmh.

"It'll be faster than Sepang, Monza and Singapore," Mr Kan added, referring to three F1 circuits.

Sepang in Kuala Lumpur is a permanent F1 Grand Prix track. Its F1 contract ends in 2015. As for Singapore's street circuit, with its latest race just concluded on Sunday, its contract ends in 2017.

The Iskandar circuit, which is designed by renowned German racetrack designer Hermann Tilke, is due to be completed in 2016. It is part of the Mo-torsports City project within Gerbang Nusajaya in the fast-developing Iskandar region.

Gerbang Nusajaya is a mixed development township just a 10-minute drive from Tuas' Second Link. It could eventually have an MRT link to Singapore.

Besides F1 cars, the FASTrack facility with its two paddocks will be able to host superbike events. There are also an off-road circuit for sports utility vehicles and two go-kart circuits - one indoor, for electric karts. Mr Kan said construction is slated to start in the middle of next year.

Observers said the recent cancellation of plans for a $380 million racetrack in Changi will be an extra boon to the Johor circuit.

Already, Mr Kan said he has received calls from well-heeled individuals to reserve garage space.

Venture capitalist Tommie Goh said he will consider putting "a couple of track cars up there".

The facility offers a "bonded area", a tax-free zone for collectors to keep their cars - including left-hand-drive models - and use them on the track.

Mr Goh was surprised by the track's upgraded status. "It'll give Singapore a run for the money," he said.

But others do not think it will pose an immediate threat. Mr Colin Syn, deputy chairman of Grand Prix organiser Singapore GP, said it will get its chance only if Singapore and Sepang do not renew their contracts.

"And like everybody else, they'd have to pay a lot of money to host the race," he said.

Earlier this year, Sepang International Circuit chief executive Razlan Razali described the Johor project "more as a playground for the wealthy", rather than a competitive racetrack.

Monday, September 2, 2013

How Singapore Billionaire Peter Lim Makes Money From Thin Air

Neerja Jetley, Contributor
Forbes Asia

Not a single brick has been laid and the ground has yet to be broken on Singapore billionaire Peter Lim’s real estate venture in Malaysia’s Iskandar project. But it has already added around $95 million to his net worth on the basis of 29.9% shareholding of his investment vehicle Rowsley. Shares of the company are up around 370% since the real estate venture was announced.

Lim is converting Rowsley into a real estate player through a reverse takeover (RTO). It will acquire a 9.23- hectare vacant tract of land in Malaysia’s Iskandar region, just across the causeway from Singapore, by issuing 2.4 billion Rowsley shares at a price of $0.12 each, valuing it at about $280 million. It will also acquire Singapore’s largest design firm, RSP Architects Planners & Engineers, by issuing another 1.25 billion shares at $0.12 each. Together, the two deals are valued at $428 million.

Since the deal was announced, shares of Rowsley have been on a tear. Lim already owns the vacant tract of land that Rowsley is now buying in a 70:30 joint venture with the Crown Prince of Johor (Malaysia’s royal principality adjoining Iskandar). The deal helps him monetize the land and raise $428 million in Rowsley for construction of the waterfront township planned. His friend Albert Hong, Principal and largest shareholder at RSP would emerge as 12.21% owner of Rowsley without having to go through the lengthy and complex process of an Initial Public Offering (IPO). Besides, he gets a ready pipeline of projects outside Singapore.

Lim’s followers (yes, there’s an unofficial website tracking him:, investors, traders and speculators are gung ho on the RTO, too, for good reason:

First, it gives them a play in the region’s most vibrant property play, the Iskandar region. In the past two years, it’s been attracting the attentions of no less than Malaysia’s richest man Robert Kuok and Australian billionaire Lang Walker along with Singapore’s Temasak Holdings, all investing top dollar into Iskandar.

Second, if property is about location, location, location, the tract of land Rowsley is acquiring happens to be less than a mile from the Singapore-Malaysia causeway. It has a plot ratio higher than others nearby, allowing for a high intensity of land use. And it’s also close to the rail link that will join the two countries by 2018.

Third, Rowsley provides investors a low-risk option compared to a pure property play in Iskandar, especially given Malaysia’s flip-flop policies on foreign ownership of property, it’s relatively high crime rate and cyclical vagaries in the property rental market. Investors are also betting that he’ll bring the  motorsports city and the medical hub he is building next door under Rowsley.

And last but not the least, the Rowsley takeover deal includes two free bonus warrants for every existing share at a pre-set exercise price of $0.14. With the fair value of the shares being placed at $0.53 to $0.67 by local bank OCBC, investors would make a more than 300% return on the investment even if they were to buy at Rowsley’s current price of $0.40. Lim, of course, would make a killing as he emerges with 38.73% of Rowsley–even before work begins on the project!

Now if that is not making money from thin air, what is?