A long-term bet on Iskandar

KUALA LUMPUR (July 18): The Edge weekly in its latest edition said that Iskandar Malaysia, launched in 2006 as the South Johor Economic region, has experienced cooling public response to property launches there.

The Edge writers Kamarul Azhar and Ben Shane Lim said that almost every major property player in the country staked a claim in this development corridor in the southern state.

In The Edge weekly edition for the week of July 20 to 26, they said Singaporean and mainland Chinese developers soon joined the fray, mega deals were struck and various high-rise projects were launched.

The magazine said the government also gave, and is giving, the area a lot of support in terms of infrastructure, tax holidays and marketing to attract local and foreign investments.

It said that apart from oversupply, the state government’s policy to curb excessive price growth too has put a brake on the corridor’s vibrant real estate market.

The Edge said that the National Property Information Centre (Napic) data shows that as at end-2014, Johor had 719,421 existing residential units, 142,567 units under incoming supply and 193,271 units under planned supply — for comparison’s sake, Johor had a population of 3.4 million while, according to the Iskandar Regional Development Authority (IRDA), Iskandar had 1.74 million.

According to Napic, the number of residential properties transacted in Johor in 1Q2015 dropped 9.1% to 7,719 units from 1Q2014 while development land transactions dropped 27.8% to 515 parcels, it said.

The Edge said that nevertheless, there were several catalytic developments that offer a clue to what Iskandar would be like in 2025, the year the corridor is expected to emerge as a metropolis with international standing.

These include EduCity, which houses many campuses of high repute, and Pinewood Iskandar Malaysia Studios, the first of its kind in Asia. Yet, the two projects are just specks in the 2,217 sq km area.

The magazine explored whether the various projects in the corridor could provide a strong base for a large and important city?

“Does Iskandar have a captive market that would create sustainable demand for the supply of properties there?” it said.

For the full story on the Iskandar region, please get a copy of the latest edition of The Edge weekly for the week of July 20 to 26, available at newstands now. Subscribe here.