Iskandar to become Malaysia’s Shenzhen

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With the backing of Singapore and Malaysia’s governments, Iskandar is anticipated to transform into a thriving production and technology hub just like what happened to China’s Shenzhen, Hong Kong’s neighbour, reported The Financial Times.

Prime Minister Najib Razak said Malaysia, particularly Iskandar, can have a mutually beneficial relationship with Singapore, similar to New Jersey’s close ties with Manhattan.

Ravi Menon, the Head of the Monetary Authority of Singapore (MAS), has also proposed that the city-state and Iskandar be considered as a single economic zone that would give investors an “integrated production and services base” in the ASEAN region.

3Policymakers see the possibility of businesses being co-located in Iskandar and Singapore,” said Singapore Management University Associate Professor Eugene Tan.

“We just don’t have the land here and Iskandar is close enough for companies to have manufacturing there but the finance and R&D in Singapore.”

In fact, some Singapore companies have already relocated a portion of their operations in Iskandar. For instance, a firm involved in machine tools reconditioning transferred its workshop to a hangar in the Malaysian region.

“Our sales office is 30 minutes from here, in Singapore. There’s a lot of walk-in customers and we can bring them here to test the machines,” said its Manager Angela Pang.

“Our rental in Singapore was going to expire and this is cheaper,” she noted, explaining that the rental cost of commercial space in the city-state is more expensive than those in Iskandar by about three times.

However, real estate investments in Iskandar have recently plummeted due to worries over a supply glut of residential properties.

In the year to March 2017, overall property investment there plunged to only US$86 million compared to US$1.4 billion during the corresponding period in 2013.

“The drop in volumes between now and 2013 is highly noticeable,” noted Real Capital Analytics Director for Asia Pacific, Petra Blazkova.

“Our view is that it stemmed from an imbalance between the supply of land or property and demand from real estate investors.”

One major factor behind the oversupply is the fact that China’s Country Garden is building a massive development on four reclaimed island off the coast of Johor.

Known as Forest City, the US$100 billion development is forecasted to have a population of 700,000 people in about 20 years.

However, Beijing’s restrictions on money outflows has affected the apartment sales in the project as most of its buyers are from China. The developer even closed down its sales galleries in the country and is planning to attract other buyers from other nations.

Iskandar Regional Development Authority’s (IRDA) CEO Ismail Ibrahim also admitted that there is a “temporary” oversupply of homes in the region. Nevertheless, he is confident that the excess units will be eventually absorbed by the market as Iskandar’s economy is anticipated to flourish.

Among top properties in Iskandar Malaysia are:

1. Meridin Medini

2. Meridin SOVOs

Image sourced from Iskandar Properties

 

Iskandar needs a further 500,000 new homes

BY NELSON BENJAMIN

JOHOR BARU: Iskandar Malaysia still needs about 500,000 new homes to cater for an estimated three million-strong population by 2025.

Iskandar Regional Development Authority chief executive officer Datuk Ismail Ibrahim said the state only had about 700,000 homes presently.

“Iskandar Malaysia is growing at an annual rate of 7% to 8% and we expect the population to grow from 1.45 million in 2005 to 3 million in 2005.

“This population will need a total of 1.2 million homes,” he said during a special media briefing here.

He added that while there was a slowdown in the property sector in Iskandar, he did not expect it to last long as there was a need for new homes.

“As for capital controls imposed by China, so far none of the China-based developers are affected as construction is ongoing.

“These are big-time and long-term investors,” he said, adding that these China-based companies were not here to buy land and flip it for profit.

Ismail added that even with the 20,000 to 25,000 homes being developed by the Chinese, the state was still in need of more houses.

However Ismail reiterated that the property sector was not among the sectors being promoted in Iskandar Malaysia.

He expressed optimism that the property sector would bounce back and said that there was huge demand for homes priced between RM100,000 to RM350,000.

“So far Iskandar Malaysia is growing on track,” he said, adding that this was despite the uncertainties globally.

He added that Iskandar Malaysia was growing much higher than the national average of 4.5% to 5% annually.

Singaporeans like landed properties in Iskandar, say developers

Landed properties and well-planned business parks in Iskandar Malaysia proved popular among Singaporeans looking to set up businesses in Johor, reported The Star.

“They are looking for business parks that are near the highways and townships because setting up shop here is only about one-third of the cost of operating in Singapore,” said Johor Real Estate and Housing Developers Association (Rehda) branch chairman Hoe Mee Ling following the official launch of the second edition of this year’s Malaysia Property Expo (Mapex).

Notably, geographical location, growing workforce, continuing investments and improvement of infrastructure helped to boost demand for said properties.

“Property sales depend largely on the external factors like quality, concept and good after-sales service,” she said.

“Customers take these things into account before considering their investment decisions.”

Another factor that helped boost demand was the presence of job opportunities in Iskandar Malaysia, said Hoe.

Despite the overall slow economy, she revealed that they observed a “positive property sales trend as the fundamental demand for properties is still there.”

While the present political and economic climate may have some short-term effect on Iskandar Malaysia’s progress, this will be mitigated by the various inherent advantages of the economic region.

In fact, Johor Baru, particularly Iskandar Malaysia, did not witness a gaping decline in property sales trend, she said.

Held at the City Square shopping mall, the three-day expo saw a total of 35 developers and exhibitors offer 19,000 properties with a total value of RM18.6 billion situated in and around Iskandar Malaysia.

 

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