Delivering on Medini’s vision

THERE is no denying that developing raw or undeveloped land is vastly different from transforming an established suburb. The land development cost can be difficult to estimate and the real estate itself is an illiquid investment as it does not generate an income for many years. Furthermore, the returns, which can be many times the cost of investment, are not guaranteed and subject to market conditions and sentiment.

So, why would a developer invest in a greenfield development such as Medini? “Medini is a flagship development poised to be a new urban township in Iskandar Malaysia. Venturing into this township (back in 2009) offered us a platform for larger exposure in Iskandar,” says WCT Holdings Bhd managing director Taing Kim Hwa.

“It also provides WCT Group with the opportunity to develop residential projects for an international market. Such developments complement Iskandar’s efforts in attracting top talent to the region. Essentially, it was the strong support of Khazanah Nasional Bhd and the federal government that compelled our decision.”

Khazanah’s leadership, credibility and integrity were clearly compelling factors, attracting both local developers and foreign parties to invest in Medini. United World Infrastructure (UWI) and Mitsui & Co Ltd, based in Dubai and Japan respectively, say Khazanah’s involvement in the township was the driving factor behind their decision to take up a stake in Medini Iskandar Malaysia Sdn Bhd (MIM), the master developer of the township. Jasmine Acres Sdn Bhd — a joint venture between Khazanah and Iskandar Investment Bhd — owns 60% of MIM while Mitsui and UWI have a 20% stake each.

CI Medini Sdn Bhd (previously known as Sunsuria Medini Sdn Bhd) is a joint venture between Japan-based real estate investment company Creed Group and Sunsuria Bhd. It also says Khazanah’s role in developing Medini influenced its decision to invest in and build commercial real estate in this township.

CI Medini managing director Takeshi Matsukata says the support shown by the Malaysian and Singaporean governments makes Medini an ideal place for developers. “Malaysia and Singapore’s governments [the latter via Temasek Holdings] are leading the key property projects in this township. Their involvement says a lot about the support given to Medini and is a compelling reason for local and foreign developers to invest in Malaysia.”

Benjamin Ong, Eastern & Oriental Bhd’s (E&O) general manager of operations for Johor Bahru, points out that Medini’s value proposition to property developers includes having MIM as its master developer. “Unlike other parts of Iskandar, Medini has a master developer responsible for planning and making the overall township a success. The presence of a master developer clearly offers corollary benefits to developers with projects within Medini,” he says.

“Its role and what it does are over and above the comprehensive network of infrastructure put in place by the government. Medini is earmarked to be an economic corridor and a growth driver for the country. This means connectivity and accessibility are the key. Clearly, this will benefit residents as the township connects to major highways. It is only a seven-minute drive to the Second Link Expressway that connects Johor to Singapore.”

He adds that MIM’s long-term vision is aligned with E&O’s strategic plans to develop in areas beyond the Klang Valley and Penang, where the company has established a reputation for building premier properties. In 2013, E&O partnered the wholly-owned subsidiaries of Khazanah and Temasek to develop a 207-acre wellness-themed development in Medini known as Avira Medini Iskandar.

Ong says the wellness concept is a new and growing lifestyle trend as people become increasingly aware of the importance of their well-being. “All these factors make Medini an attractive investment, as well as residential, destination,” he adds.

Foresight, knowledge and tenacity

WCT was among the first to invest in Medini when the idea of building a township of international standards in Johor Bahru was still an unproven concept. “Medini’s value proposition is very much catered for visionary investors as well as visionary residents. They will benefit from being first movers in this new township,” says Taing.

WCT was initially engaged by MIM to do civil infrastructure work on the 2,300 acres that constituted Medini in 2008. That was also the year its subsidiary, WCT Land Sdn Bhd, broke ground on its maiden development.

Now, WCT has three developments in Medini: 1Medini condominiums, 1Medini Garden Villas and Medini Signature Tower 1 & 2. Known as the 1Medini Hub, these developments are fully integrated and located in the central business district. They comprise retail, office and residential components and are in the vicinity of Legoland Malaysia Resorts, the country’s first international theme park; Afinity Medini, a project developed by Khazanah and Temasek; and Gleneagles Medini Hospital.

While the subdued sentiment in the property market has persisted for several years and some quarters are still questioning Iskandar’s value proposition, the developers say there is a prevailing sense of optimism over Medini’s long-term prospects and that a change in sentiment can be expected in due course.

The euphoria over the encouraging take-up of several projects in Iskandar in 2011 and 2012 has moderated as a result of the government’s cooling measures, increased competition and tighter financing conditions. And it is now business as usual.

The key developers of Medini remain committed to the long-term vision of the township and expect demand to pick up once the overall property market recovers. Several factors underpin their view: First, property in Malaysia is generally more affordable than in regional markets. Also, the country is known for its high levels of liveability. Finally, foreign investors have the opportunity to acquire choice units in developments of international standards.

James Bruyns, Mah Sing Group Bhd’s chief sales officer for C-Suites, says the region is still a favoured property destination for local and foreign investors. “Singaporeans still find Medini appealing. Property in this township is very close to the city state and offers great value for money.

“The Malaysian government also encourages foreign buyers with many incentives. This includes an exemption from the minimum property purchase threshold of a million ringgit for foreign purchasers.” Property transactions in Medini are also exempted from the Real Property Gains Tax.

Mah Sing’s The Meridin@Medini is an integrated commercial development with a gross development value of RM1.5 billion. Spanning 8.19 acres, this development consists of Meridin Suites Residences, which comprise three residential towers; Meridin SOVO; and Meridin Suites, which consist of two blocks of serviced suites.

Mah Sing procured the use of the Ramada hotel brand from the world’s largest hotel company, Wyndham Hotels Group. Ramada Meridin and Ramada Encore Meridin will be managed by leading hotel management company Topotels. Both Ramada hotel-serviced suites are scheduled to open in two years.

“Medini is already the main destination for business, healthcare, education, industrial and tourism within Iskandar. The plans for the rapid transit system (RTS) and high-speed rail (HSR) are taking shape. I expect Medini and the entire Iskandar region will become one of the most prosperous economic zones in Malaysia. Based on the current trajectory, Medini will be the central business district of Iskandar,” says Bruyns.

WCT, E&O, Mah Sing Group and other developers with an optimistic long-term outlook for the township, coupled with the tenacity to face challenging economic conditions, are planning to continue investing here.

“We have continuously promoted Medini as a destination for the public and private sectors and expect to see more multinational companies setting up a base here. This will generate middle and high-income job opportunities for the residents of Medini and those living in Johor,” says Taing.

“We envision Medini to be a much sought-after residential and commercial location as people flock here for work, higher education and high quality healthcare services. In line with this outlook, WCT is planning to launch a commercial development in Medini to meet the need for offices and retail outlets.”

Meanwhile, E&O’s Ong says the second phase of Avira will be marketed to investors in the region. “The first phase of Avira Garden Terraces (208 units) was very well received, with a 90% take-up rate. The buyers were mostly Singaporean and they remain our anchor market because of their proximity to Iskandar, their affinity for Malaysian culture and the relative affordability of this country’s real estate assets.

“Phase 1 has already been handed over to the owners. Now, we are looking at marketing Phase 2 in other countries in the region. We are already seeing a steady stream of registrants for our units.”

A liveable town

The liveability of a city or town is an increasingly important factor for global citizens. Some say liveability is even more important than a city’s economic power or global influence as it takes into account the severity of challenges there that can affect its residents’ lifestyles.

MIM took into account the factors that affect liveability when it was planning the township. As a result, infrastructure, environment preservation, healthcare and education facilities have been made available in Medini. Developers say these factors will continue to drive the demand for properties here and provide the foundation for a strong community spirit among the residents.

“The residents of Medini enjoy excellent township planning. The infrastructure allows them to enjoy the best of Johor and Singapore since it is only a short drive to Singapore, a 20-minute drive to Johor Bahru city centre and a 30-minute drive to Senai International Airport. Residents also have access to world-class amenities such as EduCity@Iskandar — an education hub — theme parks, malls and hospitals,” says Taing.

Gleneagles Medini Hospital and the Mall of Medini — a leisure and lifestyle entertainment centre built by UEM Sunrise Bhd and Iskandar Harta Holdings Sdn Bhd, a wholly-owned subsidiary of Iskandar Investment Behd — is within walking distance of WCT’s Medini Signature Towers. Marlborough College and Raffles American School is only 2km away.

Like Bruyns, Taing thinks the HSR and the RTS will enhance Medini’s appeal as an investment and commercial destination. “The proposed RTS will link Johor Bahru with Singapore in 2018. This will definitely improve connectivity for those who commute between the two cities,” he says.

“Mah Sing is also poised to benefit once this rail system is operational in 2026 as Meridin@Medini is one of the six intermediate stations in Iskandar Puteri (formerly known as Nusajaya),” says Bruyns. Meridin@Medini is also in the proximity of a number of international schools and universities that make up EduCity@Iskandar, such as Marlborough College, Newcastle University Medicine Malaysia, Trust School and the University of Southampton.

Bruyns says liveability in Medini is enhanced with green spaces. “The township has a green lung with 210 acres of parks and open spaces. Sustainable developments and a green environment benefit residents and the environment as well as adds to the beauty of this township.”

Avira’s theme of living in the heart of wellness centres on good living conditions. This development looks to create a holistic, thriving environment for the community. “We are infusing elements that result in a sustainable and holistic living environment for Avira’s residents,” says Ong.

“One way that we intend to connect the community to nature is by building a 1.6km boardwalk on the perimeter of Avira. This will allow residents to walk to the mangrove forest that fringes the development. Other examples include landscaping that follows the natural contours of the land and the natural flow of waterscapes as well as homes that feature special communal linear gardens that are turfed and landscaped.”

When completed, the Avira development will be surrounded by greenery and interconnected by tree-lined paved walkways. “Over five acres are dedicated to a purpose-built wellness sanctuary — a key element in bringing the wellness concept to life,” says Ong.

The wellness sanctuary will offer fitness facilities such as pools and multipurpose spaces for group exercise classes. “We hope residents will enjoy the freedom of being outdoors. They can cycle and jog on specially built tracks that are shaded. There will also be pavilions, R&R shelters and barbeque pits around the facility to encourage the community to gather and socialise,” he says.

This article first appeared in Medini — Poised for success, of TheEdgeProperty.com, on Sept 23, 2016. Download free copies of TheEdgeProperty.com here.