Malaysia: KAJ develops Melaka Gateway

Malaysia: KAJ develops Melaka Gateway

Melaka Gateway development
Click on image to visit Melaka Gateway.

Beside the coastal real estate developments in Iskandar Malaysia here is another Malaysian coastal project in Melaka (Malacca) known as Melaka Gateway. Along with Mandalika, Bintan Resorts, Koh Rong, Vung Ro Bay this is another ambitious coastal development project in Southeast Asia at the moment.

What caught our attention here involves Royal Caribbean Cruises in the joint development of the cruise terminal.

The Melaka Gateway is a project led by KAJ Development. If you’ve not heard of KAJ, according to Malaysia’s business weekly The Edge, “KAJ Development Sdn Bhd is a construction and engineering with a proven track record in Melaka.”. And The Sun Daily says KAJ is predominantly a construction company and now manages Malacca Zoo and Bird Park. It had earlier revamped the Malacca River.

Other Malaysian coastal projects and initiatives we’ve covered include two other offshore land reclamation developments – Marina Island Pangkor and the aborted Mersing Laguna. And also Sabah’s Kinabalu Gold Coast and Desaru Coast.

Location Map

 

From Berita Harian News

 

What’s planned?

Melak Gateway Master Plan
Melaka Gateway Master Plan. Click to enlarge.

The land size of the project is 246 hectares comprising both existing and reclaimed land. Not a large area of itself except for the fact a high proportion of the area will be reclaimed from the sea.

What’s included in the master plan?

On the land side

  • 15km of premier waterfront addresses for mainly high-rise luxury condominiums
  • Entertainment hub (Phase 1 of the development)
  • Theme park
  • Exclusive marina villas with private jetties
  • The iconic Gateway Beacon Tower housing 7-star hotel and luxury apartments
  • Health and wellness development

 

On the sea-side

  • Melaka International Cruise Terminal
  • A new ferry terminal
  • South East Asia’s biggest marina with up to 1,000 berths
  • Maintenance and repair facility for mega yachts

The Sun Daily, “Its (cruise) marina terminal will be the largest in Asia, tapping into the growing number of cruise ships plying the route which currently do not stop at Malacca due to lack of facilities.”

 

Early participants

  • KAJ Development (master developer)
  • Skyye Group (Italy) will bring in 200 branded goods shops
  • Royal Caribbean Cruise will jointly develop the cruise terminal with KAJD (3 ship capacity).
  • TRE Development has acquired six acres of land for RM88 million
  • Rinani International Aero Marine which is a Korean-Malaysian joint venture (JV),
  • Kasen International (China)

 

Some thoughts

 

Ideal Location

Malacca is ideally located half way between Kuala Lumpur and Singapore along the North-South highway. The two circles below have a 150km radius (approximately 2 hours driving distance). Not surprising Malacca has always been a domestic destination for both countries. A good quality domestic coastal tourism development here makes sense considering there are not many alternatives close to both capital cities at the moment.

Kuala Lumpur 150km driving distance

 

What’s the land development approach?

We can see the reasons for further development of Malacca. However, should this be a land reclamation project or a change of land use around Malacca to allow for greater intensity? Unfortunately, without knowing the zoning and planning constraints, as well as land ownership structure and the economics of land reclamation, its difficult to form an opinion. However, there is one thing to keep in mind. At the macro level, Malaysia has a very low population to coastline ratio compared to many of its neighbors.

 

Will there be too many marinas?

West Malaysia marinas

There are already a fair number of marinas along the west coast of peninsula Malaysia. These vary in size and quality.

According to conclusions reached by the Maritime Institute of Malaysia (MIM) in a 2007 paper titled “An assessment of the development of marinas and boating activities in Malaysia”, the country has enough marinas to cater to existing number of boats as well as the number of visiting international boaters. And based on existing berths and planned marinas coming on stream, local marinas have the capacity to absorb more arrivals in the future.

MIM further adds, “It will be interesting to see how Malaysian marinas are going to compete with one another in the small domestic market and with international marinas in an increasingly competitive market to attract boaters and their tourist dollars.”

Is the marina and boating market much different today as compared to when the paper first came out? If “there are over 1,000 berths (wet and dry) available at the top six marinas in the country” will “South East Asia’s biggest marina with up to 1,000 berths (at Melaka Gateway)” create a demand-supply imbalance?

On the other hand, if KAJ can plan and execute a good quality destination marina along the Straits of Malacca which can out do the competition it can potentially be a game changer. Coupled with Phuket’s unfavorable regulations for foreign flagged boats staying long term we may have something going here.

 

What’s the strategy for Royal Caribbean to invest in the cruise terminal?

We previously noted Sanya’s announcement to be Asia’s largest cruise port and Jeju island’s plan to be a leading Asian cruise port. Now we have similar intentions by Melaka Gateway but with a slight difference.

We are very far from experts about the cruise industry but it’s still interesting to note when one of the world’s largest cruise company takes a stake in developing a cruise port in Asia. What does it mean? Will we see more examples of this happening in future? Can someone with cruise industry experience help answer this question.

 

Sources

 

Image: TTG Asia / Melaka Gateway / Cruise Industry News

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