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

 

Johor industrial recorded RM14.9bil investment

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According to Johor Menteri Besar, Datuk Seri Mohamed Khaled Nordin, between January and May this year Johor recorded RM14.9 billion in industrial investment.

He said the statistics, issued by the Malaysian Investment Development Authority (Mida), put Johor in first place, followed by Sarawak and Pahang in second and third places, respectively.

As revealed by local media reports, the total has also surpassed the total investment of RM14 billion recorded last year.

“This shows that investors, both local and foreign, continue to be interested in investing in Johor and make the state the choice investment destination,” Khaled said.

He added that the strong investment figures show that Johor is a prosperous and peaceful state with all the necessary infrastructure, factors that help attract businesses to the state.

“The state government will ensure the continuity of this positive elements in its efforts to make Johor the choice destination for investors. We will also continue to focus on promoting investment opportunities,” Khaled said.

He was speaking at the opening of the state-level exporters forum organised by the Malaysia External Trade Development Corporation (Matrade).

The forum is one of Matrade’s initiatives to encourage local companies to expand their businesses internationally and serves as a platform to engage entrepreneurs and exporters on issues and problems related to international trade.

 

Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my

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