Sabah Development Bank prepares to reduce PacifiCity exposure to aid revival of stalled project

KOTA KINABALU, SABAH, 23 SEPTEMBER 2026 —

Sabah Development Bank Bhd will reduce its outstanding RM300 million loan exposure to PacifiCity, the RM2 billion integrated waterfront development in Kota Kinabalu, as efforts to revive the stalled project stall amid a lack of investor interest.

The state-owned lender said it is open to scaling back financing to support the revival of the 18.5-acre Likas Bay project, which has remained dormant since Pacific Sanctuary Holdings Sdn Bhd entered liquidation in 2023. Private liquidators, appointed by the courts, have conducted multiple tenders to attract potential investors—known as "white knights"—but no firm proposals have been submitted.

The bank’s move reflects the substantial capital required to restart construction, with the project’s viability further complicated by the fact that Sabah Development Bank is not the registered landowner. The property is owned by the Sabah State Government Servants Welfare and Sports Council, though it remains charged as security to the bank.

PacifiCity, launched over two decades ago, remains a financial liability for both the bank and the state government, with its revival hinging on securing a credible investor willing to inject the necessary funding. The project’s stalled status has already dampened investor confidence in large-scale waterfront developments in Sabah, with analysts noting that similar high-value projects require strong government backing to attract private capital.

Without a resolution, the site risks remaining dormant, further pressuring Kota Kinabalu’s property market.

For Kota Kinabalu’s property market, a revived PacifiCity could inject much-needed liquidity into the city’s waterfront segment, though its success depends on securing a credible investor. The project’s revival would also require addressing the issue of land ownership, as potential buyers would need assurances on development rights. The next critical step will be identifying an investor capable of meeting the substantial funding requirements, though no timeline has been set for further tenders or negotiations.