PETALING JAYA: The southern economic corridor Iskandar Malaysia has recorded cumulative committed investments of RM302.09bil and based on the current performance pace, is expected to exceed the targeted investment sum of RM383bil by 2025.
According to Knight Frank Malaysia, RM172.2bil or 57% of the total investment had been realised as of the first half of 2019.
It said 39% was foreign direct investment (FDI), mainly from China (RM40.65bil) and Singapore (RM20.57bil).
The Chinese have invested heavily in property development while the Singaporeans continue to eye the manufacturing/logistics sector, it said.
Knight Frank Malaysia managing director Sarkunan Subramaniam said in a statement that various organisations had initiated incentives to encourage investments from both local and foreign investors in the region.
They are the Iskandar Regional Development Authority (IRDA), Malaysia Digital Economy Corp (MDEC) and the Malaysian Investment Development Authority (MIDA).
“Foreign investors have shared that they were most concerned with possibilities of a lower operation cost, strategic location and talent pool/skilled labour in making their decision to invest in the region, ” he said.
Sarkunan said the availability of such factors was attractive to foreign investors, as the impact of lowering operating expenses in the flow of the supply chain on a long-term basis was essential for businesses to remain competitive.
“The manufacturing/logistics sector has been rosy with more market activities being observed during the first half of 2019. Now, investors are also eyeing the healthcare sector, a specialised asset class deemed defensive within its niche market, ” he said.
Meanwhile, the head of consultancy of Knight Frank Singapore, Tay Kah Poh, said Singaporean investors were certainly positive towards the healthcare sector in Iskandar Malaysia.
He said the advantages were that it was close to Singapore, a favourable exchange rate and also quality healthcare comparable to Singapore.
Major healthcare players such as Thomson Medical and Gleneagles are operating quality healthcare facilities in Johor and he expects that this clustering would be a huge draw for patients from Singapore.
The branch head of Knight Frank Johor, Debbie Choy, said the macro statistics for Iskandar Malaysia remained strong and there were encouraging positive sentiments for the market.
“While there are certain sectors which may be experiencing oversupply, such as the high-rise residential segment, we observe that the healthcare and industrial sectors are glowing despite the challenging property market environment.
“Opportunities in these two sectors continue to appeal to investors, ” she said.
Choy said one of the key elements that would further drive the success of attracting inbound investment into Iskandar Malaysia was perhaps ensuring a sufficient talent pool to support the respective industries.
“An overflow effect from the increased working population leading to higher demand for housing may benefit Iskandar Malaysia in the longer term, ” she added.