RESURGENCE OF ISKANDAR ON THE CARDS?

So much cold water has been poured on the Iskandar region in recent months that one begins to wonder whether this much-hyped economic zone, north of Singapore in the Johor state of Malaysia, would survive the current slowdown. Asian Property Review sought out some contrarian views.

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Dr Gerard Kho,
Futurist & Group CEO, Reapfield Academy

“Iskandar is certainly facing a “situation” now. However, I personally believe this region will be the fastest-growing economic zone in Malaysia in 10 -15 years’ time. There are lot of pull and push factors causing this; the biggest would be economic and social factors in Singapore which will inevitably cause a shift to Iskandar.

Why? Because there are only this many HDB flats that you can build below a certain price point; this many schools that can accommodate the student population and this many ships that can dock in Singapore. So eventually some segments of the Singapore population will move out of Singapore to Iskandar to stay, study and work.

You already have international standard educational institutions in Iskandar such as Marlborough College. You have shipyards being built in Iskandar. Definitely, part of Iskandar is going to be an extension of Singapore. It’s no coincidence that Iskandar is very well planned, just like Singapore.

The world class infrastructure, built and planned, such as the High Speed Rail, the proposed tunnel, the bridges, the Johor Bahru – Singapore Rapid Transit System (RTS) Link and the eventual use of electronic passes for entry and exit will make this region an advanced first world enclave. There is also talk about building a lot of 5-star hotels in the zone. Hence, I would even venture to say that Iskandar will one day surpass the capital, Kuala Lumpur as the hottest spot in Malaysia. ”

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Dato’ Sri Gavin Tee
President of Swhengtee International Investment Alliance

“Singapore and Iskandar are very complementary with each other. The comparison with Hong Kong and Shenzhen in China is not quite accurate as the dynamics are quite different. While Shenzhen is now effectively competing with Hong Kong in many areas, Iskandar’s role is very much complementary. This is because Singapore needs Iskandar to provide land and other low-cost resources that it doesn’t have; in fact Singapore needs Iskandar for its long-term economic prosperity while Iskandar plays a supporting role to the world class financial centre. Iskandar in fact is evolving to become a very integral part in the growth of Singapore.

Singapore is a leader in the financial field so Johor has the assurance of growth due to its proximity to Singapore. It is a natural beneficiary of Singapore’s wealth, and in fact, the two cities will gradually evolve to become a single economic zone where business and living are truly integrated.

Eventually, with the Johor Bahru–Singapore Rapid Transit System (RTS Link) and a possible third bridge, it would take only 15 minutes to cross the border. With prices in Johor five times lower, it will be a matter of time before more people and money spill over to Iskandar.

The completion of several world class educational, entertainment and medical facilities will further spur the movement of people from Singapore. Hence, taking a longer term view, Johor will become the most developed and even most expensive city in Malaysia.

As such, Singaporeans will miss the boat if they give in to the perception that Iskandar is overrun by a surplus of condominiums. The current oversupply situation is merely a blip in the bigger scheme of things and eventually the units will be absorbed because in relative terms, Iskandar is not that huge a development.

In Johor, even the locals feel there is an oversupply situation in Iskandar but I have personally dealt with international companies which are very confident of Iskandar and are planning to invest there. These companies are mostly from Singapore, China and lately some Western countries.

The fact is, Iskandar is a 10 – 20-year project, much like most countries’ development plans which span 10 – 20 years. It is a very well-planned and comprehensive specialzone accommodating all the facilities typical in a world class city such as infrastructure, technology, entertainment, medical and wellness. It can even be better than Singapore in terms of planning.

With Iskandar’s property price being very competitive now (lower than many other cities including Jakarta), there is a lot of upside potential to price growth. While Singaporeans steer clear of Iskandar, many mainland Chinese and Taiwanese are still aggressively buying in Iskandar as they believe in the longterm potential of the region. And with the ringgit having depreciated lately, the price has even dropped further making it a bargain now. Investing now in Iskandar is the best time as you get the best value during a market slowdown. The internationalisation of Iskandar is a sure thing as much efforts have been made by both the Chinese and local developers to market it as an international investment destination to the global community.”

sha
Shan Saeed
Chief Economist and Investment Strategist of IQI Group Holdings

“Iskandar is certainly facing a “situation” now. However, I personally believe this region will be the fastest-growing economic zone in Malaysia in 10 -15 years’ time. There are lot of pull and push factors causing this; the biggest would be economic and social factors in Singapore which will inevitably cause a shift to Iskandar.

Why? Because there are only this many HDB flats that you can build below a certain price point; this many schools that can accommodate the student population and this many ships that can dock in Singapore. So eventually some segments of the Singapore population will move out of Singapore to Iskandar to stay, study and work.

“Iskandar is China’s next hotspot in terms of its strategic location. Sea routes are becoming important factor in the New World Order in which China wants to dominate. Iskandar, along with Singapore, holds a strategic value within the ASEAN framework which China wants to influence. More importantly, Iskandar is becoming an oil and gas hub. Finally, as a global rule, any venture backed by the government will never fail. I still have confidence in the Malaysian government despite a few hiccups here and there.”

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