Iskandar Malaysia’s Top 10 Happenings

With the slowdown of the global economy and convolution of our own nation’s problems, the attraction of Iskandar Malaysia was perceived to have dampened. Some quarters even predicted the premature demise of the growth corridor. It is important for us to take stock as to whether we have actually progress over the last few years. In this article, I will highlight 10 happenings in Iskandar Malaysia which are significant, with some of them less known to the public.

1.HIGH SPEED RAIL (HSR)

This has been a painfully long awaited project and it has to be that way due to its mammoth size, funding as well as the intricacies in the cooperation between 2 sovereign nations.

On the March 8, Malaysia-Singapore Joint Ministerial Committee Meeting for Iskandar Malaysia (JMCIM) it was reported that substantive progress was noted in the planning for the Kuala Lumpur-Singapore project. Discussions are still ongoing to ensure the various implementation aspects such as the design, financing, governance, operations, security requirements, immigration requirements, and legal arrangements are thoroughly covered and the most mutually beneficial outcomes are achieved. The project is targeted to be operational by 2022.

Under proposal, the HSR project’s commercial and operating models, there is possibly an express non-stop service between Kuala Lumpur and Singapore and a transit service which calls at several stations in between.

The express service will have a travelling time of 90 minutes while the transit service model will have stations that have currently been identified are the terminus station in Kuala Lumpur at Bandar Malaysia, Seremban, Ayer Keroh, Muar, Batu Pahat, Iskandar Puteri and the final stop in Singapore at Jurong East. The latter will take about 2 hours.

The impact of this project will be directly felt in the Iskandar Puteri region. However the Iskandar Malaysia in general will also benefit due to the increased flow of people and business opportunities from the 2 economy centres, Klang Valley and Singapore to the southern corridor with a total population of more than 10 million people.

2.RAIL TRANSIT SYSTEM (RTS)

In the same Ministerial Committee Meeting, the committee welcomed Malaysia’s confirmation that Bukit Chagar would be the terminus in Johor Bahru that links to Singapore’s Woodlands North MRT Station.

The second phase of the Joint Engineering Study on the RTS Link is currently being done and we look forward to its commencement.

This project is expected to be completed by 2018/9. The greatest impact will be felt in the city area as the connectivity between the 2 stations will be smooth-running. The Bus Rapid Transit (BRT) system must be deployed effectively to move people to and from the station. Ample car-parking space must be made available.With its completion, the perennial congestion at the Woodlands Causeway will be eased. Easier travelling between Johor Bahru and Singapore will made Iskandar Malaysia a better choice to live and shop. It will create another wave of interest in properties in Iskandar Malaysia, particularly those in the city.

3.ISKANDAR INTERNATIONAL BUSINESS DISTRICT (IIBD)

This proposed development zone is an unique and dynamic development initiative by Johor Corporation (JCorp) with help from Majlis Bandaraya Johor Bahru as an effort to modernise JB.

Johor Bahru has experienced a major population increase which has spurred a major economic growth and the existence of IIBD in the city will enhance the standard of living for the local community.

IIBD has an estimated GDV of between RM20 billion and RM25 billion. The area covered by IIBD is bordered by Jalan Ayer Molek, Jalan Tun Sri Lanang, Jalan Tun Abdul Razak and Jalan Sultan Ibrahim. IIBD will consist of a 6.32-acre zone known as the Coronation Square which aims to become a catalyst in the state’s transformation projects. It will include the development of a medical suite, three apartment blocks an office tower and a hotel connected retail podium. It will have a GDV of RM3 billion and is scheduled for completion in 9 to 10 years.

4.MANUFACTURING INFLOW

Johor has always been the manufacturing hub of Malaysia. In term of total investment, it has topped the chart for many years. This can be seen in the chart below.

Our forte has been in the E&E, agro and food processing, chemical and petrochemical segments.The infrastructure such as the Johor Port, Tanjung Langsat Port and Port of Tanjung Pelepas serve important roles as liquid/dry bulk or transshipment ports for products in the hinterland. In recent years, they also serve as Regional Distribution Centre. Our proximity to Singapore enables Johor Bahru to tap on their facilities such as the Jurong Port and airports too.

In recent months, we have seen large corporations announcing their intention to relocate to Iskandar Malaysia. Among the more prominent one include Coca-Cola, Microsoft, Fuji Oil Co Ltd, Unigra, VADS, Bosch, Eternal Material Co, Altech Chemicals Ltd among others.

In other words, Iskandar Malaysia’s share is approximately 16% of the total Johor’s total investment. The major portion of Johor’s investment is from PIPC. It is also very obvious that Johor has been the prime destination for investors since 2012.

5.FOREST CITY

Forest City consists of four man-made islands, total land area of 1,386ha – about three times the size of Singapore Sentosa Island.

Forest City will offer wealthy international and local buyers luxury homes, the most advanced 3D multi-layered urban planning concept flush green surroundings with no vehicles travelling. The Integrated City with 8 major industries (Foreign Investment, Tourist Attractions, Education Hub, Entrepreneurial base, MICE, Retirement Community, E-Commerce Centers & Financial District), a Smart Eco-City that accommodates about 700,000 residents.

The unique underground layers consist of smooth vehicular traffic and ample parking spaces that truly achieve the separation of pedestrians and vehicles. The developer adopts a strategy of avoiding property play by making it a business attraction. The ingenious DUTY FREE status is expected to draw many businesses to the islands. This in turn will generate demand for houses. Phase 1 had seen very positive response with almost all the non-bumiputra lots sold. Phase 2 is now opened for booking and reportedly the booking rate is commendable.

This project will place Iskandar Malaysia in the radar of the international investors’ market again due to its uniqueness.

6.JOHOR BAHRU CITY TRANSFORMATION

The RM240mil project is apportioned into two parts. The first package is for the development of an Integrated Water Treatment Plant.  The development of a flood mitigation and sewerage system and river beautification are under Package two.

Sungei Segget runs along the heart of JB city centre. It has always been a challenge maintaining this river in an eco-friendly and functional manner.

Various past attempts did not bear the expected results. In late 2013, the re-opening of Sungai Segget was undertaken through the JB Transformation Blueprint of IRDA. IRDA and Johor Bahru City Council (MBJB) were tasked to monitor the implementation of the project with a completion deadline at 2016.

It will be pedestrian friendly to use as two bridges will be built for pedestrians to cross the river and extensive walkways will be created for easy access. This beautification and transformation program will change the city’s landscape from its present tired look into a clean and vibrant one.

7.SHOPPING PARADISE

Over the last few years, Johor Bahru has undergone major changes in the retail sector. Gone are the days of groceries and hypermarkets. Existing shopping malls like Aeon, Kota Raya, Kompleks Tun Abdul Razak went through a massive refurbishment exercises. The Aeon Mall chain garners a lot of loyal customers in their various outlets. Kota Raya rebranded itself a modern mall known as Galleria while Kompleks Tun Abdul Razak became JBCC. Johor Premium Outlets remain a major attraction.

Due to the strong Singapore currency, we saw surge of shoppers in JB during holidays and festive seasons. Increased tourist arrival to JB helps in the sector. Some of the malls carry their unique branding such Angry Birds in JBCC, Mall of Medini being next to Legoland while the others cater to the middle markets. Among those that stand out are KSL City, JB City Square, Sutera Mall and AEON Malls. Down the road, Paradigm Mall and Mid-Valley located at Skudai and Southkey will be completed. The implications of all these malls are JB will become a shopping destination for the locals as well as regional customers.

In a survey conducted recently, it was discovered that while most retail business in Malaysia had declined, JB’s had on the contrary showed some slight improvement.

8.Pengerang Integrated Petroleum Complex (PIPC)

PIPC is actually located in Pengerang, Kota Tinggi which is outside the jurisdiction of Iskandar Malaysia. However, by sheer volume of the investment, it will have economic impact on the growth corridor. It is planned to create value to the downstream oil and gas value chain in Johor. Sited in Pengerang, it is one of the largest pieces of investments in the Pengerang district and located on a single plot measuring about 20,000 acres. The project will house oil refineries, naphtha crackers, petrochemical plants as well as a liquefied natural gas (LNG) import terminals and a regasification plant.

In PIPC, oil refining facilities will add value to imported crude oil via the Pengerang Deepwater Petroleum Terminal (PDPT). This RM5 billion PDPT project is a joint-venture between DIALOG Group, Royal Vopak of Netherlands and Johor State Secretary Incorporated (SSI). This project is at its Phase 2 stage now.

The second mega-project within PIPC is PETRONAS RM53 billion Refinery and Petrochemical Integrated Development (RAPID) Project while the associated facilities will involve another RM36 billion in investment. The RAPID project site preparation is in progress and is expected to be commissioned by 2019. RAPID will have a 300,000 bbl. per day refining capacity while additional petrochemical plants will generate value to petroleum products produced in RAPID. The construction of Pengerang Integrated Petrochemical Complex (PIPC), the largest petrochemical complex in Malaysia is expected to create over 100,000 new job opportunities throughout its development stages.

The whole development of PIPC will see a total estimated investment of approximately RM120billion and is expected to boost Malaysia’s GNI by an additional RM20 billion by 2020. The mega project is also projected to create close to 9,000 new job opportunities for the local population and improve Pengerang’s socio economy immensely once completed. In the meanwhile, the upgrading of the roads is important as it will improve connectivity and accessibility to Pengerang and facilitate traffic movements in the area.

9.Multi-Media Hub

One of the new drivers for the growth of services sector in Iskandar Malaysia was identified as IT/multi-media. Pinewoods Studios was the first to be roped in. Pinewood Iskandar Malaysia Studios is a world class film and television studio facility, ideally located for the Asia Pacific region. It was constructed through the important strategic alliance of the world famous Pinewood Studios Group and the Government of Malaysia’s investment holding arm, Khazanah.

PISMS offers 100,000 sq ft of film stages, internal and external water tanks with green screen capability, 24,000 sq ft of TV studios, 30 acres of backlots, 72,000 sq ft of production offices and workshops and state of the art digital post production facilities and services.

Since the commencement of its operation, it has caused waves of interest with their productions. The downstream benefits were also felt in terms of accommodation, specific expertise and general workers.

PISMS is well known for its first filming of the United States’ Netflix drama series, ‘Marco Polo. It has just signed a Memorandum of Understandings for “Alien City” to be shot in Iskandar with a minimum budget of RM50mil (US$15mil). It is scheduled to start this year.

10.Property Sector

Although this sector is not a targeted sector under Iskandar Malaysia’s Blueprint, it began to flourish with the advent of the corridor. Nusajaya, as it was known then was the greenfield that attracted a lot of attention from foreign investor. The master developer is UEM Sunrise Bhd. Various signature developments such as Kota Iskandar, Puteri Harbour, Educity, high-end housing, Legoland and other tourist attraction, healthcare were developed.

Medini Iskandar Malaysia, a 2,200 acre land was carved out to be a special zone. With 4 zones, this area was given special incentives and status such as tax exemption for approved developers, project managers and marketing managers. There are no bumiputra and international quotas and property gains are exempted from RPGT. These attracted many developers to this area. Over the last 2 years, new launches have slowed down due to the economic condition. The Master Developer took this opportunity to reposition Medini to enable it to be a sustainable CBD of the future.

In other areas like Danga Bay and the city centre, many high-rise service apartments were launched. These were well absorbed but quite obviously the supply has outstripped the demand. The State Government as a pre-emptive measure banned all new applications.

The landed residential sector remains attractive although the no of launches and the rate of sale have slowed.

What is interesting is the discernible trend over the years. Locals began to accept high-rise living. Properties priced above RM500,000 become a norm and no longer treated as a luxury. Gated and guarded living is a desired concept. Concept development is imperative for the scheme to be saleable. Developers have to raise the standard to meet the increasing demand of purchasers.