Glomac Bhd group managing director Tan Sri Fateh Iskandar Mohamed Mansor brought up the subject of Iskandar Malaysia during a recent seminar.
His topic for the day was affordable housing and he took a few minutes to digress.
“Six months ago, people did not ask me about Iskandar. Today, people keep asking me if I have anything to sell there. Iskandar is expected to undergo a 100% urbanisation with 3 million people, both through natural and urban migration,” he told real estate agents who formed the bulk of the participants.
His remark underscores the interest in Iskandar and the legal work that goes through law firm Zaid Ibrahim & Co's Johor branch confirms that interest.
Partner Sunita S. Sothi says the law firm has seen quite a bit of land and property purchases the past year with a marked increase in interest in Ledang Heights bungalow land and Leisure Farm, and in Kulai's industrial land.
“People are sensing that Iskandar Malaysia is taking off; there is visible business development and improved infrastructure.
“We have seen interest from foreign expats working in Singapore who wish to live in Malaysia and quite a few have also decided to move their children in to study at the Marlborough College,” she says.
Sunita says that so far, the Johor state authorities have been quick to respond to queries by the purchasers and lawyers.
“We have not faced any challenges with regard to advising or handling Iskandar Malaysia transactions. The main concern investors into the area have is understanding the land system and the relevant guidelines applicable.
“Once this is explained to them they are comfortable moving forward. We sometimes have to translate documents from Malay to English, e.g. the land title searches/title documents so that they have a better understanding of what is being transacted and the procedure for the same,” says Sunita.
The last several years, a number of Klang Valley developers have bought land there. Those who went earlier before the completion of infrastructures have benefited.
Other developers are following suit. Ken Holdings Bhd executive director Sam Tan is planning a 23-acre mixed integrated project 33km from Nusajaya, in old town Johor Baru where people can work, live and play in the same development. Tan says the completion of the infrastructure was a huge booster, plus timing.
He is planning to have a hotel, serviced apartments, offices, health and education components located on a strip of land that measures 800m from end to end bordered by Jalan Yahya Awal in the south and Jalan Tarum in the north.
“Johoreans have the purchasing power, the place is vibrant,” he says.
His enthusiam is reflected by a fellow developer from Singapore. Link (THM) Holdings Pte Ltd group CEO Kenny Tan was in Iskandar more than two years ago. There was no LegoLand nor infrastructure then.
Today, Kenny has 15 acres in Medini, directly outside of Pinewood Studios. He is planning to have residential, commercial and retail developments.
“When people visit Pinewood Studios and LegoLand, they will visit us. The spin-offs from Pinewood will be promising. Each filming session will bring in 500 to 700 crew members and celebrities. We will benefit from the spillover. Each filming takes three to six months, so there should be good rental yield,” he says.
The project, with a gross development value of S$1bil, comprises four blocks of residentials of 25 to 30 storeys and another three blocks of business suites, also 25-30 storeys.
The plan is to get an international company to manage and operate the business suites and residentials of about 600 sq ft, priced at RM500,000-RM600,000 a unit, or RM750 per sq ft. Half of the residential buyers will likely be investors.
Kenny was among 200 company representatives, most of them small and medium enterprises, who attended a seminar Seizing Opportunities across the Causeway organised by Singapore-based United Overseas Bank Ltd in late Feburary.
UOB's managing director and group head of commercial banking Eric Tham says the bank has a working relationship with Singapore businesses and some have showed interest to operate here.
“We want to capitalise on this business flow. We want to ride on the momentum. The big boys know how to go about it. It is the mid-sized groups who need help.”
Tham and his team are establishing foreign direct investment advisory units within the bank in Malaysia and in the region to tap on the interest in FDI flows in the region.
The timing, says Tham, is perfect because the Singapore economy is undergoing restructuring.
The push and pull factors were there before and the recent Singapore budget brought into sharper focus the government stand on Singapore businesses expanding abroad.
Singapore's SMC Food 21 Pte Ltd recently bought land in Tanjung Pelepas for future expansion. Managing director Cheng Liang Chye says the company has operations in Pasir Gudang.
“We plan to expand production capacity in Malaysia and scale back operations in Singapore,” he says. He currently has 60 staff members in Malaysia and 100 more in Singapore.
Another Singapore company operating in Iskandar is Silicon Application Pte Ltd. Managing director Chan Wai Yin says he bought properties in Iskandar and will start production there.
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