Melaka Gateway, stay away or buy?

I just wrote about Melaka  and its potential as the next Iskandar and suddenly this new announcement came about. Melaka Gateway is envisioned to have a GDV of RM40 Billion. I repeat, RM40 Billion. This is indeed a catalytic type of development which IF successful will propel Malacca to be the next most successful growth story after Iskandar. Yes, of course it’s after Iskandar. Just look at the land size, how can Melaka beat Iskandar as a region? Nevertheless, RM40 Billion would dwarf majority of any one development anywhere else in Malaysia. As a comparison, a huge project in Penang called Penang World City by Ivory is only RM10 Billion. However, I have never heard of the developer before; KAJ Development Sdn Bhd (KAJD)
If you refer to some discussions in Facebook, generally the reviews are not really that positive. I think the word ‘White Elephant’ was used many times. In fact, everyone was recommending to buy other places instead. Let me offer a few points based on my personal opinion. For a project of this size, Melaka needs to have three other ingredients, or else, this project would never ever achieve the success as what it has envisioned.
International airport. At this point in time, Melaka airport is nowhere near any of the Top 4 Airports in Malaysia namely KL, KK, Penang and JB. Without an easy access, the targeted buyers who may be from out of Malaysia will never happen. In fact this is one major reason why Penang has yet to really take off as a property destination of choice for Chinese from China or Indonesian from Indonesia. There must already be a vision and plan now on the transformation of the Melaka airport. The attraction of more flights to start flying in.
Transportation roadmap. Even today, during any public holiday, Melaka is packed and jammed with cars. A typical 50 minutes journey to Melaka from KL  may take up to 2.5 hours or more. Parking is lacking due to the sheer amount of cars inside the Melaka city. Whether a monorail, or enhancement of the bus services or the further widening and building of more roads, flyovers etc, this must be started today. Perhaps the Bullet Train between KL and Singapore should have a stop in Melaka? Rome was not built in a day and without this being planned concurrently with the Melaka Gateway, people may just stay away during holiday seasons and fly to Penang instead.
Third, development of tourism products. It’s true Melaka river is now much cleaner than before and there’s a cruise but everything has to be improved by leaps and bounds. Do not look elsewhere, just look at Singapore’s Clarke Quay. If this can be made very lively, there would be a lot of spillover effects. The houses along the Melaka River can be converted to restaurants, cafes and this would in turn ensure that the houses are well taken care off. The river cruise needs to be made much more informative; create a story. Be reminded, until today, no Lochness has ever been found in Scotland’s Lochness lake but try telling the local folks that Lochness does not exist and see if you can come out alive.
If I have deep pockets, I think I may buy the early phases of the Melaka Gateway. As long as the phases continue to happen, I should earn some decent return. However, if I am buying for the first time, Melaka Gateway may not be the best project at the moment. Something like investing in Batu Kawan because of Ikea. I had to remind my friends, IKEA will only open in 2020 if everything happens according to plan. You want to buy now? in Feb 2014? Would it be a white elephant? I do not think so but whether it would be a great success remains to be seen. Will update when there are more announcements.
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