Project to remove property overhang in Johor

Project to remove property overhang in Johor

MUCH excitement has been generated from the recently announced Iskandar Development Region (IDR) – the next engine of growth to spur new business activities and generate greater wealth for the people.

With the ambitious target of attracting some RM47bil in new investment over the next five years and creation of 800,000 jobs, the Government’s vision is to create a global investment and economic hub with an initial estimated investment of RM17.7bil by the Government and private sector.

Covering the logistic triangle of Senai Airport (in the north), Port of Tanjung Pelepas (west) and Johor Port in Pasir Gudang (east), major projects include the transformation of Bandar Nusajaya into the state’s new administrative centre, development of an Educity and tourist resorts.

Austin Perdana township developed by Mah Sing group in Tebrau
An analyst with a foreign research house said the IDR stood out in two areas – having a strong drive behind the initiative through a newly set up statutory body, the South Johor Authority that would be headed by a minister; and having two designated free access zones (FAZs) in Johor Baru and Bandar Nusajaya.

The FAZs, with plans for high-end residential, retail, hotels, F&B and entertainment outlets, are areas where foreigners can have access to without the usual immigration procedures or time restrictions.

Besides construction companies, developers will be among the biggest winners of the rapid development in south Johor.

Property developers are excited by the prospects of new development opportunities in the IDR and are eager to build their presence in the robust growth region.

They said the generation of more economic activities and employment opportunities would go a long way to alleviate the severe property overhang in certain areas in Johor.

The strong growth rate will also generate wealth, thus allowing buyers to commit to purchasing properties.

The substantial allocation for infrastructure will also improve the accessibility of the more remote parts of Johor and make them attractive for property development.

The initiative will certainly drive demand for property from Malaysian and foreign buyers. Currently, Malaysians make up the bulk of buyers for projects in south Johor, with only 5% comprising foreign purchasers.

The ratio looks set to change with the ease of entry into south Johor through the creation of the FAZs with no immigration and customs check for foreigners. This will spawn greater interest for international businessmen and expatriates based in Singapore to reside in the IDR.

This will also foster the development of high quality offices and business centres, hotels and serviced apartments as well as high-end residential units.

The proportion of foreigners is expected to increase to 11% by 2025 compared with 6% in 2005, especially in the more skilled professional and managerial category, and this group of professionals will be a strong target group for medium to high-end properties.

Famed for its fiercely competitive market, Johor has seen the convergence of a long list of property companies.

They include Asiatic Development Bhd, KSL Holdings Bhd, Mulpha International Bhd, Ekovest Bhd, Crescendo Corp Bhd, Bandar Raya Developments Bhd, Boustead Properties Bhd, United Malayan Land Bhd, Daiman Development Bhd and Johor Land Bhd.

Asiatic is developing the 2,802-acre Indahpura project, which is close to the Senai Airport, while Boustead Properties is undertaking the 1,061 acre-Mutiara Rini; Crescendo (562-acre Danga Bay); Ekovest (Iskandar Waterfront) and IOI Properties (2,689-acre Bandar Putra Kulai).

Meanwhile, KSL is involved in the 228-acre Taman Nusa Bestari, 710-acre Taman Bestari Indah and Taman Kempas Indah.

Analysts have identified Klang Valley-based SP Setia Bhd, Mah Sing Group Bhd and IOI Properties Bhd as the more successful developers in Johor as these companies have achieved commendable sales despite the highly competitive and soft market conditions there.

Mulpha’s 1,371-acre Leisure Farms, located 11km away from Tuas in Singapore, looks like another potential winner. The high-end landed residential development has 700 acres left for development.