Iskandar reaching critical mass as investments rise

SINGAPORE — Iskandar Malaysia is attracting investments that will form a critical mass to kick-start economic activity and power the region to become the special development zone that the Malaysian government envisions it to be, said Ms Sarena Cheah, joint managing director of property developer Sunway Berhad’s property development division.

And along with robust economic activity, there will be greater demand for the increasing supply of homes being constructed or planned for launch in Iskandar.

“Having many companies coming into Iskandar is a good thing … because we need the critical mass to start anything. For Iskandar to work, everyone should do well. We’ve seen nodes of activity coming up in the healthcare, education and oil and gas industries ... then residences will come in,” Ms Cheah told TODAY yesterday.

“As of the end of last year, Iskandar had committed investments of RM130 billion (S$50.7 billion) and as we understand, more than half of them have already been invested. I think that’s very well … and we’re talking about reputable companies and even the Singapore Government putting money into Iskandar,” she added.

Singapore firms such as private education provider Management Development Institute of Singapore, property developer CapitaLand and electronics manufacturer Nestronics are three that have established a presence there, despite growing worries about its diminishing cost advantages.

Ms Cheah said Singaporean interest in owning a property in Iskandar is boosted by the favourable exchange rate, which stood at 2.56 yesterday. In addition, the Medini zone within Iskandar is exempted from cooling measures implemented by the Malaysian government, which restrict foreign buyers to properties at or above RM1 million. They are also required to pay the Real Property Gains Tax of 30 per cent for units sold within five years of ownership and 5 per cent for those offloaded after the fifth year.

“There has been very strong support for the Iskandar special economic corridor and Medini being exempted from the cooling measures can actually benefit the region,” said Ms Cheah.

A report from Malaysia’s National Property Information Centre showed there were close to 300,000 homes being built or in the planning stage in Johor as at Q4 last year. In Iskandar, residential projects in the pipeline include Chinese developer Country Garden’s 9,000-unit development and a project by Iskandar Waterfront, which will yield more than 4,000 homes.

Sunway’s latest project is a 728ha township in Iskandar. Its first phase, an integrated development named Citrine, will be launched next month. TODAY understands that its 328 residential units will be offered at a starting price of around RM800 per sq ft.