Property

Iskander the Great

Iskander the GreatIn spite of the global recession-induced setback following its launch in November 2006, Iskandar Malaysia has been seeing a drastic increase in property prices in some of its districts since last year. Much of this can be attributed to the recovering economy, which is now seen to be cause for a vast confidence boost amongst investors and thus a growing demand for housing and commercial properties.Spanning 2,217 square kilometres (roughly three times the size of Singapore), Iskandar Malaysia is set to become the next hub for business, living and environment within the Southeast Asian region, with a targeted population of 1.35 million by 2025.

Comprising the five flagship zones of Senai-Skudai, Eastern Gate Development, Western Gate Development, Nusajaya & Medini, and Johor Bahru City, the Iskandar Malaysia development is focused in its economic functions, being both diverse and holistic.

Recent real estate trends are indicators of a bright future. According to OSK Research Sdn Bhd (OSK Research), the Iskandar region presents the biggest upside for developers in terms of supply and price appreciation compared to developers that are exposed to other high growth areas within Malaysia, namely in the Greater Kuala Lumpur and Penang regions.The research house is vouching for Malaysian property kingpins SP Setia Bhd and UEM Land Holdings Bhd as their top buys for mid- to large-scale property companies that stand to gain most from the current up-cycle that Iskandar is experiencing.

KGV-Lambert Smith Hampton (Johor) Sdn Bhd Executive Director Samuel Tan has said that in general, house buyers are now more focused on factors such as security and the developers’ track records, relenting to property prices in Iskandar that have appreciated from 45 to 160 percent within the last five years.

Experts are also saying that the entry of the likes of Bandar Raya Developments Bhd, IOI Properties Bhd, Dijaya Corp Bhd and Mah Sing Group Bhd into Iskandar Malaysia provides substantial reason to be optimistic about the southern region’s potential, especially in the vicinity of Johor Bahru, in matching the property market in the Klang Valley.

Both residential and commercial properties are seeing an increase in prices with the emerging developments of Legoland in Nusajaya and EduCity in Nusajaya, which is becoming a hotspot for education providers such as Singapore’s Raffles Education Corp to open new campuses, as well as Columbia Asia and Gleneagles Hospitals, all of which are to be completed in the next four years.In a report by Channel News Asia last August, CIMB Research economist Song Seng Wun said, “Pressure on property in Singapore could be alleviated because there is certainly now a much more viable option in Johor as a result of the improved communication, logistic network, the whole landscape as an alternative for Singaporeans to base themselves in Johor either for home or for business.”Similarly, CH Williams Talhar & Wong Director Danny Yeo has stated that there are few drawbacks for people to buy property to live in, particularly in the Nusajaya vicinity, provided that they look at prime developments featuring the key elements of excellent security, a waterfront vista and first-rate developers.

And there’s more to property here than just hype. Chief Executive of Iskandar Regional Development Authority (IRDA) Ismail Ibrahim disclosed recently that as at the end of September 2011 the total cumulative committed investment in Iskandar Malaysia recorded from various sectors is SG$31.74 billion (RM77.82 billion), with domestic and foreign investments respectively amounting to SG$19.05 billion (60 percent) and SG$16.01 billion (40 percent). By June 2011, Singapore’s investment in Iskandar had reached SG$1.7 billion, with the republic holding the number one spot in terms of manufacturing project investments. Furthering the improvement of the bilateral ties that Singapore has with Iskandar Malaysia are the major planned projects of the 218-bed Regency Specialist Hospital, the Raffles University and the Management Development Institute of Singapore (MDIS) campus.

Suffice to say, Singapore holds a great deal of confidence in Iskandar in spite of its initial take-off woes. Strategic in its 25-kilometre distance from the republic’s CBD and with pervasive residential, commercial and communication infrastructure as well as development land to gratify the public and commercial communities alike, Iskandar’s property is likely to be an advantageous bet, if not the best “overseas” commodity, for Singaporeans to invest in.