inside iskandar

Quarterly Property Digest for Iskandar Malaysia Inside Iskandar

Inside Iskandar Issue: 1

4Q 2011

Years On Fuelling Property Growth in Iskandar Malaysia

Quarterly Property Digest for Iskandar Malaysia


nside Iskandar is envisaged to provide a

high value perspective of Iskandar

Malaysia for investors and stakeholders

to further encourage to further encourage the flow of domestic

and foreign investments into Iskandar

Malaysia. This publication outlined the

current and future property market trend;

highlighting potential property investment

sectors.

This inaugural issue of the quarterly

publications focuses on the theme 5 Years

On, highlighting the progress of property

developments within Iskandar Malaysia since

its inception. This publication also signifies

the beginning of the second phase of

development in Iskandar Malaysia driven by

the completion of several catalytic projects in

Nusajaya, Senai and Johor Bahru City Centre.

To remain competitive in the global arena, a

brief review on other regional investment

destinations forms part of this publication.

Meanwhile, the market watch focuses on the

assessment of property sector performances

including transaction values, capital

appreciation, rental rates and yields. A close

track of new infrastructure and projects

within Iskandar Malaysia provides pertinent

yardstick in identifying potential investments

and growth areas.

This publication is a joint effort between

Iskandar Regional Development Authority

(IRDA) and Rahim & Co. Information

highlighted in this publication are based on

sampling of selected projects to represent

general property market condition within

Iskandar Malaysia

I Foreword 1

Feature Article 2 5 Years On

Market Watch

Landed Residential 9

Condominium 11

Purpose Built Office 13

Shop Office 15

Industrial 17

Editorial

1


Iskandar Malaysia celebrated its fifth anniversary in December 2011 on the back of a string of

achievements, and started Year 2012 from a position of strength. The Comprehensive

Development Plan 2006-2025 laid the foundation for holistic growth in the economic region,

and the results over the last five-year period have been a testimony to the commitment and

diligence of all parties involved in building Iskandar Malaysia.

Physical and economic development activities are complemented by initiatives to uplift the

quality of life of warga Iskandar Malaysia, especially in terms of skills upgrading, facilitation to

participate in the new economic opportunities being created, as well as in sharing the gains

from the prosperity. This social inclusiveness approach contributes towards the establishment

of an environment in the region that is conducive to Work, Invest, Live and Play, and further

enhances the value of Iskandar Malaysia as a destination of choice.

As at December 2011, Iskandar Malaysia had attracted over RM84 billion of cumulative

committed investments, of which 45 per cent have already been realised. A significant number

of key developments, in sectors such as education, tourism, healthcare, creative industries,

logistics and manufacturing will be completed and operational within the next three years. The

trend of incoming investments is continuing, and it is pertinent that all stakeholders, including

the business community and the public, are continuously updated on the progress of and

opportunities offered by Iskandar Malaysia.

Therefore, the publication of “Inside Iskandar : Quarterly Property Digest for Iskandar Malaysia”

is timely and strategic. It will serve as a reference point on the latest property market in

Iskandar Malaysia, which in turn, will reflect the level of dynamism and vibrancy of the region.

Congratulations to Iskandar Regional Development Authority (IRDA) and Rahim & Co. for this

initiative.

Foreword

1

Committed to Iskandar Malaysia YAB Dato’ Haji Abdul Ghani Othman Menteri Besar of Johor

"For development to be

meaningful, its objective must include

prosperity for all, and the benefit of progress

must cascade down to all levels of society such that no one will be

excluded or displaced" YAB DATO’ HAJI ABDUL GHANI OTHMAN MENTERI BESAR OF JOHOR

New Straits Times, 25 May 2011

Iskandar Malaysia is on the Right Track YAB Dato’ Seri Mohd Najib Tun Razak Prime Minister of Malaysia

Since its inception in 2006, Iskandar Malaysia is well on track in realizing the establishment

of a dynamic and modern metropolis of international standing by 2025. The development

in Iskandar Malaysia is geared towards being inclusive and sustainable, for the rakyat to

enjoy an enhanced standard of living, with good access to quality education, high-value

employment and business opportunities, and an enriched quality of life. It is in line with

the vision of the Malaysian Government to provide equitable and fair wealth distribution

across all segments of society.

Today, Iskandar Malaysia is experiencing rapid urbanization growth with several catalytic

projects actively taking place. Steady investments from both local and international

property players reflect the market’s confidence in Iskandar Malaysia. I believe, with the

continuous effort by the Johor State Government backed by full support from the Federal

Government, more investment will flow into Iskandar Malaysia thus, elevating the image

of Southern Johor to greater heights.

“Inside Iskandar : Quarterly Property Digest for Iskandar Malaysia” will play a crucial role in

providing information pertaining to property market trends in Iskandar Malaysia. This

inaugural issue entitled “5 Years On: Fuelling Property Growth In Iskandar Malaysia” is a

great effort to recapitulate the property growth in Iskandar Malaysia and will serve as a

basis for future growth.

On this note, I would like to congratulate Iskandar Regional Development Authority (IRDA)

for their effort in promoting Iskandar Malaysia. I also would like to express my

appreciation to Rahim & Co, one of the leading real estate consultancy firms in the country

for the successful publication of “Inside Iskandar : Quarterly Property Digest for Iskandar

Malaysia”. The government of Malaysia is committed to ensure continued progress and

success of Iskandar Malaysia.

"After all I believe the

only sustainable development path is

one that is inclusive and allows everyone to

be part of the value creation process" YAB DATO’ SERI MOHD NAJIB TUN RAZAK PRIME MINISTER OF MALAYSIA

New Straits Times, 12 December 2011

2


ISKANDAR MALAYSIA

Remembering the Past,

Embracing the Future.

Throughout history of the Malay Peninsula, Johor has been a gateway to international trade and cultural exchange. Whether it was

known as Palandas, Gangga Ayu, Lo-Yue, Galuh or Jauhar, the state has been at the forefront of the Peninsula’s social, political and

economic development. It is this unique perspective that continues to enrich Johor’s strong traditions of openness and

understanding. At the same time, Johor enjoys a liberal and cosmopolitan reputation unrivalled either in the peninsula’s long

history or in the glittering landscape of modern Malaysia.

It was a Johorean, Dato’ Onn Ja’afar, who founded the United

Malays National Organisation (UMNO), and he was also the first

who demanded that the party opens its doors to all Malayans

regardless of creed or colour. It was another Johorean, Tun Dr

Ismail Abdul Rahman, who moved in favour of citizenship for all

residents in Malaya - to make them loyal citizens of the new

independent nation. In this context, Iskandar Malaysia is the

extension of the innovation and imagination that moved celebrated

sons of Johor in the likes of Temenggong Ibrahim, Sultan Abu Bakar,

Dato’ Abdul Rahman Yassin, Dato’ Onn and Tun Dr Ismail to

undertake great and ambitious tasks for the public good with practicality, wisdom and principle. It is the enterprise of Wong Ah

Fook and the Kuoks, the hard work and the commitment of the Alsagoffs and other Hadhrami families, and it is the courage and

conviction of the Puthuchearys.

Regardless of their accomplishments, these individuals are but threads in the great tapestry that is the social and cultural milieu of

Johor. The state has produced generations of Malayan and Malaysian leaders in politics, government, commerce, society, sports,

academia and the arts, and they have been able to do so because of a breadth of vision formed over centuries of embracing

differences for the common good.

The centre of economic gravity is shifting inexorably to the East, along with the formation of a ‘New Silk Road’ stretching from the

Philippines to Africa. The New Silk Road is based on maritime rather than the overland routes of old. Johor (through Iskandar

Malaysia) with its maritime trading history, has the potential to be a significant part of this new route. Regionally, Iskandar Malaysia

is at the centre of Southeast Asia, located in between South China Sea and Malacca Straits, with links to the Indian Ocean.

With all available key advantages, Iskandar Malaysia has the opportunity to re-establish Johor’s economic and historical leadership

within the region, by keeping to the traditions of openness and pragmatism and leveraging on existing strengths as well as develop

complementary advantages with the rest of the region

Sultan Abu Bakar was also

unofficially known as "The Father

of Modern Johor", as many

historians accredited Johor's

development in infrastructure,

administrative system, military and

civil service to him in the 19th

century. He became the first Malay

ruler to travel to England in 1866.

“It is often said in Peninsular Malaysia that the people of Johor are “a little different”: highly refined, educated and

fiercely independent. Johor is, after all, the birthplace of the post-war Malay nationalism that led quickly to the

independence of Malaya, and even today it is regarded as the last and greatest bastion of that political tradition”

Introduction

3


ISKANDAR MALAYSIA

5 Years On

ESTABLISHING ISKANDAR MALAYSIA

The idea of developing a new economic corridor was

first mooted in the Ninth Malaysia Plan. The Federal

Government under the leadership of Tun Abdullah

Ahmad Badawi, the Prime Minister then, conducted

feasibility study to design a vibrant economic region to

propel growth in southern Malaysia in collaboration

with Khazanah Nasional Berhad. A Special Projects

Team (SPT) was formed in Khazanah to undertake the

task of preparing a Comprehensive Development Plan

(CDP) for the Southern Johor Economic Region (SJER).

On 4th

November 2006, Iskandar Development Region

(IDR) was officially launched by His Royal Highness the

Sultan of Johor, and witnessed by YAB Prime Minister

and YAB Chief Minister of Johor. This marks the

beginning of an exciting and dynamic phase of South

Johor’s economic development as outlined in the form

of the CDP. SJER later came to be known as the Iskandar

Development Region and subsequently Iskandar

Malaysia. Iskandar Malaysia covers an area of 2,217

square kilometres, estimated to be three times the size

of Singapore, offering ample supply of land but

competitively priced. The region already has an

excellent supply of infrastructure and utilities such as

electricity, transportation networks and services

including broadband telecommunications. The

development of Iskandar Malaysia is modelled after the

Pearl Delta Economic Zone, envisaged to capitalise on

its current synergies with Singapore aiming to

complement each other as an economic hub.

After 5 years, the contribution of Iskandar Malaysia

towards Johor’s economic growth is significant. To date,

Iskandar Malaysia accounts approximately 70% of the

total GDP of Johor.

Flagship B: Nusajaya is seen as the anchor of Iskandar

Malaysia with various high-impact and key catalytic

projects. EduCity, Legoland, Medini, Pinewood Iskandar

Malaysia Studios, Puteri Harbour and Afiat Healthpark

are among these projects.

Meanwhile, as Johor Premium Outlet in Kulai opened

last November, Flagship E: Senai-Skudai is poised to

grow to greater heights. This is further amplified by a

RM70 million investment to develop Senai Airport City

and completion of Senai Hi-Tech Park and MSC

Cyberport by 2013 and 2014.

Another highly anticipated project is the revitalization

of Johor Bahru City Centre under Flagship A. The

upgrading of Central Business District and waterfront

city will re-position Johor Bahru as a vibrant, modern

and liveable city centre.

The Eastern and Western Gates will continue to play a

vital role in Johor’s industrial sector and provide major

infrastructure facilities to Iskandar Malaysia. The

multiple projects introduced in both Flagship Zones will

significantly elevate the image of these localities

economically and socially hence enhancing shipping,

logistics and trade in Port of Tanjung Pelepas and

Tanjung Langsat Port.

“I have no doubt that Iskandar

Malaysia will be a vanguard for Malaysia and the region in the

years ahead” YAB DATO’ SERI MOHD NAJIB TUN RAZAK PRIME MINISTER OF MALAYSIA

The Star, 12 December 2011

3

‘ISKANDAR MALAYSIA’ is set to become

Southern Peninsular Malaysia's most developed

region, where living, entertainment,

environment and business seamlessly converge

within a bustling and vibrant metropolis.’

Pearl River Delta Economic Zone (2008-2020 Plan) by

China's National Development & Reform Commission,

is the most economically dynamic region of Mainland

China aims to boost the pan-Pearl River Delta as a

center of advanced manufacturing & modern service

industries catering for international shipping, logistics,

trade, conferences, exhibitions & tourism. It covers

Guangzhou, Shenzhen, Dongguan, Foshan, Zhongshan,

Zhuhai, Jiangmen, Huizhou & Zhaoqing.

4


Feature Article

WHERE WE ARE

Prior to the presence of Iskandar Malaysia, the property

scene in Johor Bahru had been to some extent quiet.

Market catchments are predominantly locals with

sporadic Singaporean investment. Development

activities took place in scattered locations carried out

by private developers. Projects undertaken are non-

correlated to each other due to the absence of proper

monitoring authority. As a result, without strong

catalytic projects, the scale of impact created from

these projects is rather low thus, incapable of elevating

the image of Johor Bahru to its true potential.

In early 2000, projects undertaken in Johor Bahru are

predominantly residential and shop offices. Transaction

market then was rather slow whereby between 2005 to

2008, values of several properties in Johor Bahru

depreciated. For instance, prices of single storey terrace

houses in some parts of the city area dropped between

2%-13% while prices in suburban areas declined

between 10%-18%.

The same goes to the prices of 2-storey terrace houses

whereby selling prices for selected properties

depreciated by 6% and 19% in the city centre and

suburban area respectively. However, selling prices of

established townships in the likes of Taman Bukit Indah

and Taman Austin Heights amongst others remained

stable due to its unique offerings and comprehensive

facilities.

The introduction of Iskandar masterplan had activated

Southern Johor property scene. Public awareness related

to investment opportunities in Iskandar Malaysia grew.

This is evident by the surge in the selling prices for

residential, commercial and industrial properties within

all growth areas in Iskandar Malaysia. Capital values

appreciated between 45%-160%, depending on the type

of property and location, compared with the prices

registered five years ago.

A 2-storey terrace house in Horizon Hills, Nusajaya

managed to record 50% capital appreciation from its

launching price of RM300,000 (2008) to the current price

of RM450,000. In East Ledang, 2-storey semi detached

units launched in 2008 at RM750,000, are now tagged at

RM1.2 million, suggesting growth of 60%.

The positive sentiment on Iskandar Malaysia properties

was also seen in the commercial sector. Shop offices

managed to record even higher appreciation rate. Selling

price of 3-storey shop offices in Sutera Utama, Nusajaya is

currently priced at RM1.8 million, commanding 130%

growth from its launching price in 2006 at RM780,000.

Rental rates of office building stabilized and several office

buildings are charging at higher rental rates. As of 2010,

Menara MSC Cyberport and City Square are rented at

RM2.60psfpm compared to RM1.50psfpm and

RM2.00psfpm respectively in 2005.

Industrial lands at Southern Industrial and Logistics

Cluster (SiLC) were originally sold at RM21psf in 2006. The

current asking price stands at RM45psf, marking value

appreciation of approximately 115%.

As foreign investments continue flowing into Iskandar,

demand for quality housing and commercial properties is

expected to increase. Iskandar Malaysia is witnessing

more high-end projects especially along the Johor Straits.

These properties have set a new benchmark in property

pricing, development concept and product offerings and

had created a new market segment in Iskandar Malaysia.

Aeon Bukit Indah catalysed the commercial growth in Taman

Bukit Indah, Nusajaya

Meanwhile, rental rates of existing office buildings in

Johor Bahru City Centre came under pressure between

2000 to 2006. Due to lack of strong demand driver in

Johor Bahru City Centre and the need to maintain and

attract new tenant, landlords are forced to lower down

the rental rates. On average, rental rates in 2000 stood

at RM1.98psfpm while in 2006, rental rates dropped by

about 11% to 12%; averaging at RM1.74psfpm.

“I am confident that Iskandar Malaysia is moving on the right track” MASAHIKO HORIE

JAPANESE AMBASSADOR TO MALAYSIA

The Star, 15 October 2009

5


THE COMPETITIVE EDGE

Albeit strong government support, constant promotion

and steady inflow of foreign direct investment (FDI),

Iskandar Malaysia is still exposed to global economic

uncertainties. Apart from the Asean five lead

economies namely, Indonesia, Thailand, Singapore and

Philippines (including Malaysia) touted as attractive

investment destinations, Australia, China, Hong Kong

and India are several regional key competitors to

Iskandar Malaysia.

Nevertheless, political stability, availability of relatively

cheaper labour, transparent legal systems and low

levels of land price and rent are the key advantages

enjoyed in Iskandar Malaysia.

DELHI, INDIA � Population: 11 million (2011)

� World largest urban agglomeration by area

� Average current rental yield: 3.1%

� Growth areas (National Capital Region – NCR):

- New Okhla Industrial Development Authority

(NOIDA)

- Uttar Pradesh

- Haryana

� FDI: USD2.76 billion (April to September 2010)

� Potential investment sector: Telecommunication,

metallurgical industries, power, computer

hardware & software and construction.

JAKARTA, INDONESIA � Population: 9.58 million (2010)

� To become the 10th largest economy in the world

by 2025 with a total GDP of RM13.7 trillion & per

capita income of RM47,000.


� Growth areas (6 development corridors)

- Java’s Northern Coast Corridor

- East Trans-Sumatra

- South Trans-Kalimantan

- Trans-Sulawesi

- Bali-Nusa Tenggara Track

- Papua-Maluku

� FDI: USD5.27 billion (3Q11)

� Potential investment sector: Timber, shipping,

automotive, food and agriculture (total 22

economic areas)

SHANGHAI, CHINA � Population: 23 million (2010)

� To become an international city with a well-

balanced urban and rural development system and

to lead the upgrading restructure of the Yangtze

River Delta


� Growth areas (satellite cities)

- Putuo District

- Pudong New Area

- Qingpu New City

- Jinshan New City

� Target commencement: 2012

� Potential investment sector: Advanced

manufacturing, emerging industries, modern

MELBOURNE, AUSTRALIA � The most liveable city in the Economist Intelligence

Unit's latest survey


� Growth areas

- Southbank

- Port Melbourne

- Melbourne Dockland

- South Wharf

� Potential investment sector: Serviced Apartment,

condominium, commercial

These competitive edges have proved successful in

attracting investments as Malaysia was listed as the

world's 10th most attractive FDI destination by global

management consultant A.T. Kearney in its recent FDI

Confidence Index study.

Country 2010 2011 Change

China 1 1 0

India 3 2 1

Brazil 4 3 1

United States 2 4 -2

Germany 5 5 0

Australia 7 6 1

Singapore 24 7 17

United Kingdom 10 8 2

Indonesia 20 9 11

Malaysia 21 10 11

The 10 Most Attractive FDI Destinations

Source: AT Kearney

Regional Investment Destination

Source: Rahim & Co Research

Khazanah and Temasek, the state-owned investment companies of

Malaysia and Singapore, will jointly develop integrated projects in

southern Malaysia and Singapore. The development land parcels are in

Marina South and Ophir-Rochor in Singapore. Meanwhile, the estimated

RM3 billion ($952 million) of projects in Medini and Pulau Indah, Iskandar

Malaysia will consist of residential, retail and “wellness-related offerings".

5

6


Projects Completion Location

FLAGSHIP A

KPJ International University College 2013 Johor Bahru

Sg. Segget Rehabilitation 2013 Johor Bahru

FLAGSHIP B

Stadium Sports Complex Q2 2012 EduCity

Multi-Varsity Complex Q3 2012 EduCity

Legoland Q3 2012 Medini North

Marlborough College Q3 2012 EduCity

Lifestyle Retail Mall Q3 2012 Medini North

International Student Village Q4 2012 EduCity

Traders Hotel 2H12 Puteri Harbour

Indoor Theme Park 2H12 Puteri Harbour

1Medini 2013 Medini North

Medini Square 2013 Medini North

Pinewood Iskandar Malaysia Studios 2013 Medini Business

Legoland Water Theme Park 2013 Medini North

Raffles University Iskandar 2013 Educity

Management Development Institute of Singapore 2013 Educity

FLAGSHIP C

Petrochemical & Maritime Industrial Hub 2012 Tanjung Bin

FLAGSHIP D

Pasir Gudang Specialist Hospital 2012 Pasir Gudang

Universiti Teknologi Mara 2012 Bandar Seri Alam

Malaysia Art School 2012 Bandar Seri Alam

Excelsior International School 2013 Bandar Seri Alam

Help University College 2013 Bandar Seri Alam

FLAGSHIP E

Senai Hi Tech Park 2013 Senai

MSC Cyberport 2014 Senai

WAY FORWARD

To ensure further growth and progress, efforts must be

intensified in order for Iskandar Malaysia to become a

strong and sustainable conurbation of international

standing within the next 15 years, as envisioned by the

Comprehensive Development Plan. They are:

� Ensure the success of key projects

Projects such as Legoland Malaysia, Marlborough College

and EduCity are scheduled to fully come on stream in

2012. It is important to ensure the success of these

projects in order to build investor and public confidence

in Iskandar Malaysia, thereby attracting more

participation and investment into the region.

� Develop high-speed rail links

The development of a high-speed rail links with

connectivity to Iskandar Malaysia would stimulate

economic activity by drastically reducing travel time,

thereby encouraging the flow of talent and investment

into the region.

� Cluster new developments

This will create physical and geographical density that is

necessary for the efficient flow of ideas and innovation,

creation of liveable communities, as well as spur hubs of

economic activities.

� Intensify social development

Initiatives to enhance social development within Iskandar

Malaysia are top priority if there is to be fair and

equitable distribution of benefits across communities in

the region. Such efforts need to be intensified to also

ensure further buy-in from local residents, who should be

the main beneficiaries of developments.

� Iskandar Malaysia REIT

A “Social Real Estate Model” has been formulated under

IRDA’s Wealth Sharing programme which utilises

commercial and market-driven mechanisms to achieve

the objective of enabling all communities to fully benefit

from the wealth of Iskandar Malaysia but with priorities

to the lower income group.

� Implementation of Iskandar Blueprint

The Iskandar Blueprint is a pertinent tool in coordinating

all development plans to adhere to Iskandar Malaysia’s

standard and expectation. To date, 19 out of 20

blueprints have been approved with 13 in progress to be

implemented.

Feature Article

PROMISING OUTLOOK

As at 1H11, committed investment in Iskandar Malaysia

totalled at RM77.38 billion, of which 59% are from

foreign investment funds. The construction of major

infrastructure and catalyst projects are currently taking

place and will be completed as scheduled.

A sum of RM6.3 billion has been allocated in the Ninth

Malaysia Plan to improve transport connectivity within

Iskandar. Coastal Highways (which will cut travelling

time from Nusajaya to Johor Bahru from 40 minutes to

20 minutes) is well on track

0

10

20

30

40

50

60

70

80

2006 2007 2008 2009 2010 2011 (Mar)

RM

bil

lio

n

Committed Investment in Iskandar Malaysia

Government Properties Utilities, tourism & others Manufacturing

Key Projects to be Completed by 2012 / 2013

Source: IRDA

Source: IRDA & Various Developers Website

7


SENAI AIRPORT

� Total investment: RM70 million for Aero Mall

Project by Senai Airport Terminal Services Sdn Bhd

(SATS)

� Launched: 2008

� Completion: 2011

� To establish Senai Airport City comprises of:

- High Tech Park: 1,138 acres

- Cargo & Logistics Park: 928 acres

- Commercial & Residential Park: 652 acres

JOHOR PREMIUM OUTLETS

� Total investment: RM150 million via JV between

Genting Group & Simon Property Group

� Launched: 2009


� The first Premium Outlet Center® in South East Asia

and the 70th outlet centre in the Premium Outlets

portfolio

AFIAT HEALTHPARK

� Developed by UEM Land Berhad

� Launched: 2008


� Spans 67.2 acres and caters modern medicine,

traditional and complementary medicine (TCM) and

wellness.

� Columbia Asia Hospital worth RM70million opened

in 2010

IM PUBLIC HOUSING (PRISMA)

� Total investment to date: RM200million

� Launched: 2008


� The objective is to build a better and improved

quality rental housing in Iskandar Malaysia with

improved public facilities in a conducive living

environment

SOUTHERN INDUSTRIAL & LOGISTICS CLUSTER (SiLC)

� Total investment to date: More than RM115 million

� Developed by UEM Land Berhad

� Launched: 2007

� Completion: On going

� Offers unique green industrial park concept

anchored by BioXcell

� More committed biotech companies from India,

France, South Korea & United States

LEGOLAND

� Total investment to date: RM720 million

� Launched: 2008


� Developed by Iskandar Investment Berhad

� Legoland's first in Asia and only its sixth worldwide

PORT OF TANJUNG PELEPAS EXPANSION

� Total investment to date: RM6.4 billion

� Launched: 2000

� Completion: On-going

� Developed by MMC Corporation Berhad

� Port of Tanjung Pelepas set a world record in 1999,

as the fastest growing port handling 1 million TEUs

in the first 571 days of operations

MEDINI

� Total investment to date: RM4.1 billion

� Launched: 2008

� Completion: 15-20 years plan (expected 40%

completion by 2014)

� Developed by Iskandar Investment Berhad Berhad

� A facilitation fund of RM180.3 million from UKAS

for the construction of Coastal Highway (4.7km)

SENAI HI-TECH PARK

� Total investment to date: RM3 billion

� Developed by MMC Group of Companies

� Launched: 2009


� Emphasis on green technology industries of the future and on the high-end semiconductor solar

advanced technology and materials

COASTAL HIGHWAY


� Work commencement: 2008

� Completion: February 2012

� Constructed by: KS Tebrau Sdn Bhd

� Coastal Highway links Nusajaya from Danga Bay

� It is partially complete with the opening of the

Danga Bay Interchange

PINEWOOD ISKANDAR MALAYSIA STUDIOS

� Total investment to date: RM400 million via JV

between Khazanah Nasional & Pinewood Studios

Group

� Launched: 2009


� Pinewood Studios has hosted movies such as James

Bond, Batman and Lara Croft, among others

EDUCITY

� Developed by Iskandar Investment Berhad Berhad

� Committed varsities include:

- Newcastle University Medical Malaysia

(NUMed) (completion: 2011)

- Marlborough College (completion: 2012)

- Netherlands Maritime Institute of Technology

(completion: 2014)

- Raffles University (completion: 2014)

7

FLAGSHIP E

FLAGSHIP B

FLAGSHIP C

8


Flagship Update

RESIDENTIAL

COMMERCIAL

INDUSTRIAL

CATALYTIC PROJECT

PUTERI HARBOUR

� Total investment to date: RM350 million

� Completion: 15 years plan (expected to be fully

completed in 2021)

� Developed by UEM Land Holdings Berhad (ULHB)

� Puteri Harbour is the southernmost marina and

waterfront development on mainland Asia

DANGA BAY

� Developed by Danga Bay Sdn Bhd

� Danga Bay covers 1,800 acres of land along Johor

Bahru’s Lido Beach

� Completed developments in Danga Bay include

Casa Almyra, Danga View Apartments, shop offices

at Danga Walk and a convention centre

LIDO BOULEVARD

� Total investment to date: RM2.7billion



� Developed by Central Malaysian Properties Sdn Bhd

(CMP)

� One of the biggest private finance initiatives along

the Lido waterfront after Danga Bay

KOMTAR REFURBISHMENT

� Allocation : RM5.5million



� Developed by Johor Corp (JCorp)

� KOMTAR is a 29-year old building well-known as a

shopping center in the 1980s and early 90s

KSL CITY


� Launched: Retail component launched 2010


� Developed by KSL Holdings Bhd

� KSL City Developments comprises a mall, hotel and

apartment

BANDAR SERI ALAM

� Developed by UM Land

� Bandar Seri Alam is also known as the ‘City of

Knowledge’ aiming to be the center of educational

excellence in the eastern part of Iskandar Malaysia

� Latest projects:

- Universiti Teknologi Mara (2013)

- Excelsior International School (2013)

- HELP University College ( 2013)

- Malaysia Art School (2012)

- Masterskill Univ. College of Health Sciences (2011)

TANJUNG LANGSAT PORT EXPANSION

� Total investment to date: RM10 billion


� Completion: On-Going

� Developed by Johor Corp (JCorp)

� The port would have between 12-14 berths

according to the long term expansion plan. It

currently has 7 berths.

GALLERIA @ KOTARAYA

� Total investment to date: RM2.5million



� Developed by Damansara Asset Sdn Bhd, subsidiary

of Johor Corporation (JCorp)

� The renovated Kotaraya will incorporate 179 lots of

retail spaces

EASTERN DISPERSAL LINK (EDL)



� Completion: February 2012

� Constructed by: MRCB Lingkaran Selatan

� The EDL will connect the end of North-South

Expressway Southern Route at Pandan to the new

Sultan Iskandar Building CIQ Complex

SENAI DESARU HIGHWAY (SDE)




� Constructed by: Senai Desaru Expressway Berhad

� The SDE shortens travel time from Senai to Desaru

from 2 ½ hours to one hour.

SENIBONG COVE

� Gross Development Value: RM1.7 billion

� Launched: 2010

� Completion: 10 years plan (first phase completion

in 2012)

� Developed by Front Concept Sdn Bhd & Walker

Corp

� Senibong Cove is the first waterfront residential

project in Johor, modelled after Hope Island Resort

Gold Coast, Australia

KOTA ISKANDAR


� Launched: 2009


� Developed by Cahaya Jauhar Sdn Bhd

� New state administrative center housing 76 state

and federal agencies

FLAGSHIP D FLAGSHIP A

9


LANDED RESIDENTIAL

Single storey and 2-3 storey terrace houses have the

largest supply in Johor Bahru with a total of 85,715 and

83,471 respectively in 2005. However the supply of 2-3

storey houses overtook single storey developments in

2006 which makes it the preferred type of housing as a

result of the introduction of newer housing schemes

with multiple storeys. In 2010, 2-3 storey terrace

houses formed the majority of stock with 95,691 units

followed by single storey houses amounting to 75,850

units. Records of supply of landed residential properties

in Johor Bahru recalibrated in 2008 due to

reclassification of supply stock by JPPH.

All single storey terrace, single storey semi-detached

and detached homes registered negative annual growth

from 2006 to 2010 indicating that buyers were no

longer satisfied with basic one-storey houses.

Prices for single storey homes have been stagnant with

minor increases throughout the years signalling a weak

demand. The highest growth in price was for 2-3 storey

semi-detached houses with a 29.7% increase since

2005. Single-storey semi-detached homes recorded a

negative annual growth with prices gradually decreasing

since 2005. Prices of detached houses peaked in 2008

with an average transaction price of RM428,488 but

declined the following year as buyers were beginning to

be more cautious following the financial crisis.

Prices for old single and double-storey homes in the

secondary market have not appreciated significantly

especially in areas outside the city centre. Prices for

these properties maintain to fetch low returns due to

the continuous offerings of new landed housing units in

the market which offers a more attractive product.

Demand for matured residential areas such as Kim Teng

Park, Serene Park and Taman Pelangi remain strong due

to its ideal location being close to the city centre and

essential amenities.

Modern housing units that feature the latest design

with gated and guarded facilities saw increase in price

of between 10%-30% such as those in Austin Heights,

Taman Sutera Utama, Adda Heights and Horizon Hills.

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2005 2006 2007 2008 2009 2010

RM

Average Price per Transaction for Landed Residential

Properties in Johor Bahru

Single Storey 2-3 Storey Single Storey Semi-D

2-3 Storey Semi-D Detached

Source: JPPH, Rahim & Co Research

Source: JPPH

Source: JPPH

9

85,715 90,556

94,483

74,169 75,340 75,850 83,471

91,201 99,395

89,239 92,829 95,961

6,226 6,318 6,176 5,223 5,273 5,273 7,042 7,752 8,110 7,214 7,801 8,201

21,439 21,606 21,701 18,063 18,080 18,086

0

20,000

40,000

60,000

80,000

100,000

120,000

2005 2006 2007 2008 2009 2010

Un

its

Supply of Landed Residential in Johor Bahru

Single Storey 2-3 Storey

Single Storey Semi Detached 2-3 Storey Semi Detached

Detached

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

2006 2007 2008 2009 2010%

Supply Growth of Landed Residential Properties in Johor Bahru

Single Storey Terrace Growth 2-3 Storey Terrace Growth

Single Storey Semi Detached Growth 2-3 Storey Semi Detached Growth

Detached Growth

Supply Growth of Landed Residential Properties in Johor Bahru

10


Property Market Tracking Market Watch

New stock of landed properties will continue to grow in Iskandar especially

along new transportation lines. Concentration of landed properties will be

towards Nusajaya area (Flagship B) dubbed as Nusajaya Residence developed

by UEM Land. Horizon Hills, East Ledang, Ledang Heights and Nusa Idaman

will be positioned as Iskandar Malaysia’s exclusive gated residential enclave.

Meanwhile, to the east of Johor Bahru City Centre, Bandar Seri Alam and

Senibong Cove will cater the landed residential demand in Flagship D. Bandar

Seri Alam by UM Land, touted as ‘City of Knowledge’, aims to be the center of

educational excellence in the eastern part of Iskandar Malaysia. To date,

several committed projects in Flagship D include Masterskill College,

University Technology Mara and Excelsior International School which will be

completed in 2013.

Senibong Cove is the first waterfront residential development in Johor,

modelled after Hope Island Resort in Gold Coast, Australia. The development

was the product of Australian property developer Walker Corporation Pty Ltd

UEM Land Holding Berhad (ULHB) is the

master developer of Nusajaya, the largest

integrated urban development in Southeast

Asia. Incorporated in August 2008, ULHB is

wholly-owned by Khazanah Nasional Berhad.

The prime objective is to turn Nusajaya into a

regional city with diverse catalyst

developments. Kota Iskandar, Puteri Harbour,

Southern Industrial and Logistics Cluster

(SiLC), Afiat Healthpark and Nusajaya

Residence are the signature projects of ULHB

in Nusajaya.

"When the entire

(Iskandar) project was first launched in 2006, the

locals had been sceptical, but have over the years

progressively turned more optimistic, especially after

witnessing the progress that Iskandar has made to date." DATUK WAN ABDULLAH WAN IBRAHIM

CEO, UEM LAND HOLDINGS BERHAD

Business Times, 10 June 2011

Distribution of Selected Existing and Upcoming Landed Residential

Location Property Type Launching Price

(year)

Current

Price

Appreciation

%

Sutera Utama 2.5-storey terrace RM420k (2008) RM700K +67%

Sutera Utama 2-storey semi-D RM750k (2008) RM1.1m +46%

Austin Heights 2-storey cluster RM236k (2004) RM400k +69%

Adda Heights 2-storey cluster RM336k (2007) RM500k +49%

Horizon Hills 2-storey terrace RM300k (2008) RM450k +50%

East Ledang 2-storey semi-D RM750k (2008) RM1.2m +60%

Capital Appreciation in Selected Residential Properties


Adda Heights

Location: Tebrau

Launch Price: RM336,000 (2007)

Current Price: 500,000

East Ledang

Location: Nusajaya

Launch Price:RM750,000 (2008)

Current Price: RM1,200,000


Leisure Farm

Location: Nusajaya


Current Price: RM600,000

Horizon Hills

Location: Nusajaya



Taman Sutera Utama

Location: Skudai



Austin Heights

Location: Tebrau



Existing Landed Residential

Upcoming Landed Residential

Setia Eco Cascadia@Setia Indah

Built-up: 1760sqft-1920sqft

Dev. Price: From RM900,000

Launched: Dec 2011

Expected Completion: 2014

Bandar Seri Alam

Location: Masai



Senibong Cove

Built-up: From 3,400 sqft

Dev. Price: From 508,000

Launched: 2010


Mont Calista @ Taman Pulai Bayu

Built-up: 3,050 sqft

Dev. Price: RM694,000-RM800,000

Launched: Dec 2011


Nusa Sentral

Built-up: 2,100 sqft – 2,300 sqft


Launched: 2010


11


0

50

100

150

200

250

300

350

400

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

Adamai Wadihana

Condo

Lagenda

Tasek

Bistari

Impian

The

Habitat

Condo

Molek

Pine

Datin

Halimah

Condo

Stulang

View

Condo

RM

/psf

%

Launch Price, Current Asking Price and Gross Yield for

Selected Condominiums in Johor Bahru

Developer Price Current Asking Price (RMpsf) Gross Yield

CONDOMINIUM

18,161

19,603

21,372

20,823

22,757 23,297

7.9%

9.0%

-2.6%

9.3%

2.4%

-

5,000

10,000

15,000

20,000

25,000

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

2005 2006 2007 2008 2009 2010

No

of

Un

its

%

Supply vs Growth of Condominium/Apartment in Johor Bahru

Condominium Condominium Growth

292 254 268

365

585

447

102 91

174 195

272

370

63 38

73 57 72

145 122 106

171 171

279

332

6 7 24 11 56 45

4 - - - 9 6

-

100

200

300

400

500

600

700

2005 2006 2007 2008 2009 2010

Vo

lum

e

Volume of Transaction and Selling Price by Price Range of

Condominium/ Apartment in Johor Bahru

100,001-150000 150,001-200,000 200,001-250,000

250,001-500,000 500,001-1,000,000 1,000,000 & Above

The condominium market in Johor Bahru had shown

continuous growth since 2005, with the biggest supply

entering the market during the economic boom of 2006

and 2007. However, growth started declining during the

global financial crisis of 2008. In 2010, total supply of

existing condominiums increased by only 2% to 23,297

units, reflecting the cautious attitude of developers on

the impacts of the property market crisis.

Demand (measured by the volume of transactions) for

condominiums in 2005-2010, had grown significantly

from only 583 transactions recorded in 2006 to 1,345

transactions in 2010, reflecting the growing popularity

of high-rise living. Volume of transactions increased by

6% between 2009/10 and about 33% of the total

transactions recorded were for condominiums priced

between RM100,000 to RM150,000, followed by

properties priced between RM150,000 to RM200,000,

which made up about 28% of the total transactions.

Condominiums included in our study have shown

potential of giving yields between 6%-10%. Current

asking prices show that values for some older

condominiums have depreciated at a range of 15% to

20%. Of late, prices have improved with average price

range from RM150-RM400psf. Even though these

condominium buildings are old and less attractive in the

secondary market, demand for rent is quite high due to

their strategic location in the matured area of the city

centre, where there is a scarcity of vacant land to build

new condominiums. The highest rental rate noted is at

Molek Pine, ranging from RM2.50psfpm-RM3.00psfpm,

allowing potential yield of 8%-10% (based on current

asking prices that are between RM350psf-RM400psf).

Demand remains strong due to limited supply in Johor

Bahru. In spite of this, low and medium-priced

apartments in the RM150,000 price range have dipped

to be below RM100,000 in the secondary market in

most areas. The number of units up for sale by public

auction companies in areas such as Masai, Pasir Gudang

and Plentong remains high.

Source: JPPH

Source: JPPH


11

12


Market Watch

Distribution of Selected Existing and Upcoming Condominium

In February 2011, Global Asia Investment (Macau) Ltd (GIAM)

acquired two blocks of Molek Pine Tower for RM200million. The

blocks will be used for its “Malaysia My Second Home” program

for its Japanese clients. The condominium blocks have been

designed to cater to the requirement of the Japanese

community, such as specific bathroom features like the Japanese

‘Ofuro’ as well as ‘Onsens’ (simulated natural hotspring pools).

Imperia Condominium Molek Pine Tower

The Seed

Built-up: 1,240sf – 2,390sf

Dev. Price: From RM320psf

Take-up: 70%

Launched: 2010


Existing Condominium

Upcoming Condominium

On average, asking selling prices of existing

condominiums in Johor Bahru stood at RM276psf.

Prices for high-end condominiums such as Petrie

Condominium in Johor Bahru and The Straits View in

Bandar Baru Permas Jaya are on the rise. The Straits

View, previously transacted at RM250-RM300psf in

2008, is now being sold at around RM300-RM350psf.

Newly launched projects in the likes of Ujana in

Nusajaya and Molek Pine Tower are sold out while

Fairway Suites in Horizon Hills and The Seed in Taman

Sutera Utama have done well registering more than

70% sales performance. D’Esplanade Residence @KSL

City in Century Gardens is expected to do the same as it

nears completion date.

In November 2011, Imperia Condominium located near

the Puteri Harbour has set a new benchmark for

condominiums in Johor Bahru priced at RM600-

RM700psf. This sets a new tone and expectation in the

market for high-end condominium in Iskandar Malaysia

– potentially achieving prices comparable to high-end

condominiums in Klang Valley


1Medini

Built-up: 720sf – 1,704sf


Launched: 2011


Ujana



Take-up: 100%

Launched: 2010


Fairway Suites



Take-up: 70%

Launched: 2010


Imperia@Puteri Harbour

Built-up: 700sf-1,200sf


Launched: Nov 2011

The Habitat

Launch Date: 1993

Completed Date: 1999

Built-up: 1050sf-2380sf

Launch Price: RM270psf

Asking Price: RM460psf

Adamai

Launch Date: 2008

Completion Date: 2009

Total Units: 47



Bistari Impian

Total Units: 512



Molek Pine Tower

Built-up: 1,300sf – 2,300sf


Take-up: 100%

Launched: 2011


Stulang View

Launch Date: 1990


Total Units: 176



Wadihana

Launch Date: 1994


Total Units: 170



Lagenda Tasik

Launch Date: 2006


Total Units: 286



Tropez@Tropicana Danga Bay



Take-up: 60%

Launched: 2011


13


SHOP OFFICE

3,658 4,289 4,478 4,627 4,799

3,613

17,037 17,573 18,108 18,666 19,010 19,345

4,767 5,108 5,189 5,473 5,643 5,880

1,825 1,831 1,919 1,921 1,982 1,982

-

5,000

10,000

15,000

20,000

25,000

2005 2006 2007 2008 2009 2010

No

of

Un

its

Supply of Shop Offices in Johor Bahru

1 - 1 ½Storey 2 - 2 ½ Storey 3 - 3 ½ Storey 4 - 4 ½ Storey

129

57 73 66 71

54

883

746

911

676

826

883

263 201

388

273 326

420

70 46 60 53 41

69

-

100

200

300

400

500

600

700

800

900

1,000

2005 2006 2007 2008 2009 2010

Volume of Transactions of Shop Offices in Johor Bahru

1 - 1 ½ Storey 2 - 2 ½ Storey


25 10 13 13

17 12

284

253

285

225

286

323

146

106

212

163

221

273

47 32

44 36 34 46

-

50

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010

RM

/mil

lio

n

Total Value of Transaction of Shop Offices in Johor Bahru



The most popular type of shop office in Johor Bahru is

2-2½ storey, registering the highest number of supply at

19,345 units in 2010 which have been steadily

increasing since 2005. The 3-3½ storey shop collected

the highest annual growth rate at 3.6% whereas 1-1½

storey recorded the lowest annual growth rate at -0.2%

hinting at a supply typology shift. Total supply of shop

offices increased to 30,820 in 2010 from 27,287 in 2005.

The 2-2½ storey shops subsector has the highest

volume of transaction followed by 3-3½ storey shops.

The number of transactions for 2-2½ storey shops

recorded a 25% drop from 2007 to 2008 but is steadily

increasing as the economy recovers. The volume of

transaction for 3-3½ storey shops has also increased by

28% in 2009/10, signalling a stronger demand. The total

transaction of 1-1½ storey shop house has been

declining since 2005, suggesting a weak demand for

such properties.

Transaction of shop offices are mainly in the price range

of RM500,000 to RM1,000,000 for 3-4 storey shops.

Intermediate units of 3 storey shop offices launched at

RM800,000 in Taman Molek during mid 2000, are now

fetching prices of up to RM1.3million. The total

transaction value of a 3-3½ storey shop office recorded

the highest appreciation of 86% after 5 years. Units

facing the main roads and located in established

commercial areas are some of the factors affecting the

prices.

On the other hand, the price range for 2-2½ storey

shops are around RM250,000-RM500,000. In newer

housing estates such as Taman Nusa Bestari in Nusajaya

and Taman Sutera Utama and Taman Molek in Johor

Bahru, 2-3 storey shop offices have appreciated in price

over the last two years. Rentals for a 3-storey shop

office are in the region of RM5,000 and RM8,000 per

month for an intermediate unit and RM15,000 and

RM25,000 per month for a corner unit. Gross yields for

such properties are also lower, dropping from 6% to 7%

two years ago to 5% per annum for intermediate units

as rental growth were slower than growth of capital

values.

In 2010, shop offices in Taman Sutera Utama, Johor

Bahru were launched at RM2.08mil for an intermediate

unit and RM2.3mil to RM2.6mil for a corner unit. Given

the monthly rental of RM 7,500 for an intermediate unit

and RM13,000 for a corner unit, the yield for the shop

offices would be at a range of 4%-6%.

Source: JPPH

Source: JPPH

Source: JPPH

13

14


Market Watch

Distribution of Selected Existing and Upcoming Shop Offices

Location Property Type Launching Price

(year)

Current

Price

Appreciation

%

Monthly

Rental Return

Sutera Utama 3-storey shop RM780k (2006) RM1.8m +130% RM7,500 (5%)

Taman Molek 2-storey semi-D RM750k (2008) RM1.1m +46% RM7,000 (6%)

Austin Heights 2-storey cluster RM236k (2004) RM400k +69% RM6,500 (5%)

Nusa Bestari 2-storey cluster RM336k (2007) RM500k +49% RM6,500 (6%)

Capital Appreciation in Selected Shop Office Properties


“Many buyers consider prices of shop houses in

Johor Bahru lower than those in Kuala

Lumpur. They would make good

investments in view of the developments

taking place within Iskandar Malaysia.” SIMON HENG

CHAIRMAN, REHDA JOHOR BRANCH

Star BizWeek, 6 August2011

In the coming years, shop office projects in Iskandar Malaysia will evolve due to rapid sweep

of urbanization that is currently taking place. Typical shop office design will soon be replaced

with a vibrant and innovative design concept emulating Klang Valley’s shop office

environment. New shop office concept that gains popularity in Klang Valley include Shop

Unit Mall Office (SUMO) and semi-detached offices. These concept emphasize on the

creation of central open area courtyard, a unique common area for street and cultural

activities that also offers alfresco style F&B

Sunrise Avenue in Setia Alam, Shah Alam offers

semi-detached shop offices featuring roof top

garden terrace as its unique selling features. This

new ‘work style’ concept will host multiple retail,

services and F&B outlets. Due to its unique offerings,

Sunrise Avenue command the highest selling price in

the vicinity.


Taman Sutera Utama

Location: Skudai



Austin Heights

Location: Tebrau



Taman Molek

Location: Johor Bahru



Pasir Gudang Business Center

Location: Pasir Gudang

Launch Price: RM1,100,000 (2008)


Existing Shop Office

Upcoming Shop Office

Southkey Lakefront Shop Offices

Built-up: 3,929 – 24,962 sqft

Dev. Price: RM1.1mil – 9mil

Launched: 2010


Nusa Bestari

Location: Nusajaya



Indah Walk 3 @ Bukit Indah

Built-up: 947 – 4,499 sqft


Launched: 2011


Oasis @ Tropicana Danga Cove

Built-up Area: 5,040sqft – 7,140sqft

Dev. Price: RM1mil to RM1.8mil

Launched: 2012


15


PURPOSE BUILT OFFICES

7,079,262 7,083,352 7,083,352

7,486,655

8,047,551 8,152,908

0.06%

5.69%

7.49%

1.31%

6,400,000

6,600,000

6,800,000

7,000,000

7,200,000

7,400,000

7,600,000

7,800,000

8,000,000

8,200,000

8,400,000

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2005 2006 2007 2008 2009 2010

(Sq

ft)

Gro

wth

(%

)

Supply vs Growth for Purpose-Built Office in Johor Bahru

Purpose Built Office Purpose Built Office Growth

96%

86% 84%

96%94%

95%

80%80%

80% 80%80%

80%

90%

94% 95%

87%85%

70%

72%73%

61%

62%

73%

76%

50%

50% 48%50% 50%

50%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010

Occ

up

an

cy R

ate

(%

)

Occupancy Rate of Selected Office Buildings in Johor Bahru

Ansar Tower Landmark Tower City Square

KOMTAR Plaza Pan Global

1.00

1.50

2.00

2.50

3.00

2005 2006 2007 2008 2009 2010

RM

/psf

Rental Trend of Selected Office Buildings in Johor Bahru

Ansar Tower City Square

Johor Tower City PlazaEPF Building Landmark Tower

Plaza Pan Global Menara MSC Cyberport

Total supply of office space experienced significant

growth in 2008 climbing 5.69%, increasing total net

lettable area to about 7.49 million sf from 2005 to 2008.

Supply continued to rise to 7.49% in 2009, adding an

additional lettable area of 560,896 sf with the

completion of four new office buildings.

In 2010, the occupancy rate for purpose built office

buildings range from 50%-95%, with the highest

occupancy recorded at Ansar Tower. The strength of

the office tower to attract and maintain tenants could

be attributed to the integration of the retail mall

(Kotaraya) as part of the building. Kotaraya is currently

undergoing renovation and will be renamed to

Galleria@Kotaraya. Occupancy rate of Landmark Tower

has been stagnant for the past six years at 80%. The

lowest occupancy rate noted in Johor Bahru is about

48%-55% recorded by Plaza Pan Global followed by

KOMTAR with a slightly higher occupancy rate ranging

from 61%-76%. KOMTAR is undergoing refurbishment

works and is targeted to be completed by 2012. Upon

completion, KOMTAR will be positioned as modern

integrated commercial centre, which shall enhance its

occupancy and rental rates.

Generally, the office space market in Johor Bahru has

been soft since the Asian financial crisis in 1997 as

rentals within office towers in and around the city

centre hovers between RM1.50-RM2.50 psfpm inclusive

of service charges.

One of the most popular office locations in Johor Bahru

is City Square - mainly due to the presence of its retail

mall and its location along Jalan Wong Ah Fook, which is

arguably the busiest road in Johor Bahru. The rental

rate for City Square grew between 2005 and 2006 from

RM2.00psfpm-RM2.25psfpm and has been steadily

increasing throughout the years to around

RM2.60psfpm currently. Menara MSC Cyberport also

recorded a significant increase of rent from

RM1.50psfpm in 2006 to RM2.40psfpm in 2008.

Source: JPPH

Source: JPPH


15

16


7.07%

5.86%

6.76%

4.58%

6.81%

2.45%

0

100

200

300

400

500

600

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Merlin Tower City Plaza Landmark

Tower

Menara MSC

Cyberport

Menara TJB Plaza Pan

Global

RM

/psf

%

Selling Price and Yield of PBOs in Johor Bahru

Market Watch

Menara MSC Cyberport, previously known as Menara

Sarawak, received its approval as the first MSC Malaysia

Cybercenter in 2006. Then in 2008, it received ISO

9001:2000 certification, making it an ISO certified MSC

Malaysia Cybercenter Management. The building’s MSC

status has become its key feature to attract tenants.

Iskandar Regional Development Authority (IRDA) was

the previous anchor tenant before IRDA moved to

Danga Bay. In 2011, the building holds Johor Bahru’s

highest rental rate for offices together with City Square

at RM2.60psf.

A notable event in 2008 was the opening of the new

Sultan Iskandar Customs, Immigration and Quarantine

Complex (CIQ) near the Johor Bahru Sentral, which

comprises of office blocks housing 15 government

agencies

Distribution of Selected Existing and Upcoming Purpose Built Office (Rental RMpsf Per Month)

Existing Purpose Built Office

Upcoming Purpose Built Office


Medini Square

Johor Corp Tower

RM2.00psf

Landmark Tower

RM2.00psf

EPF Building

RM1.90psf

Menara Tabung Haji

RM2.00psf

City Plaza

RM1.60psf

Holiday Plaza

RM2.00psf

Wisma LKN

RM1.90psf

KOMTAR JB

RM2.50psf

Johor Tower

RM2.00psf

City Square

RM2.60psf

Menara MSC Cyberport

RM2.60psf

Ansar Tower

RM2.20psf

Plaza DNP

RM1.40psf

Metropolis Tower

RM2.00psf

Bank Negara

RM2.00psf

Plaza Pan Global

RM1.40psf

Waterfront Offices at Puteri Harbour


“Like a giant Lego project, Malaysia is assembling the

pieces of an investment zone that is destined to become a metropolis about three times the

size of neighbouring Singapore.”

Reuters, 7 July 2011

Menara MSC Cyberport The new look of KOMTAR

17


INDUSTRIAL

6,008 6,008 6,008 6,008

5,164 5,164

2,213 2,233 2,232 2,244 2,177 2,177

1,444 1,471 1,510 1,538 1,267 1,276

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2005 2006 2007 2008 2009 2010N

o. o

f U

nit

s

Supply of Industrial Properties in Johor Bahru

Terraced Semi-Detached Detached

278

226

248

228 239

333

138 132 128

107

126

163

122 128

75 58

46

76

-

50

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010


86.31 74.29 75.71 75.10 80.35

111.01

81.38 74.41 86.28 63.66

84.68 122.79

196.99

225.57

262.30 254.77

165.29

252.85

-

50.00

100.00

150.00

200.00

250.00

300.00

2005 2006 2007 2008 2009 2010

RM

/mil

lio

n


Over the past 5 years, the supply of industrial

properties in Johor Bahru is mostly stagnant with minor

increments between 2007/08. The supply of terraced

industrial properties that make up 62% of the total

supply, decreased significantly by 14% from 6,008 units

in 2008 to 5,164 units in 2009. All industrial properties

across the board recorded a negative annual growth.

Terraced factories recorded the lowest annual growth

of -2.5%, followed by detached factories at -2.0%. In

total, the supply of all industrial properties decreased

from 9,665 units in 2005 to 8,617 in 2010.

In 2005, the total volume of transaction of industrial

properties stood at 540. After 5 years, there was a slight

increment of 5%, bringing the number of total

transactions up to 572 in 2010. The bulk of the

transactions were made up of terraced factories. Both

terraced and semi-detached factories recorded a

modest annual growth of 3.1% and 2.8% respectively.

As a result of the economic crisis in 2008, demand for

industrial properties decreased measured by the

volume of transactions. However, the market began to

turn in 2010, as total transactions increased by 28%

compared to the year before.

Semi-detached factories were noted to have the highest

growth in transaction value at a rate of 7.1%. Detached

properties are the most expensive; however, in 2009 it

suffered a 35% decline in transaction value. The

transaction values of terraced and detached industrial

properties were seen to be similar, recording an annual

growth rate of approximately 4.3% and 4.2%

respectively.

Meanwhile, prices of industrial land are seen to be

slowly increasing from 2005. Areas such as Tampoi,

Kempas, Seelong, Senai and Nusajaya had seen a

gradual increase in the values of industrial land. For

instance, prices in Nusa Cemerlang Industrial Park have

increased by 50% since 2008. Converted industrial lands

in Tampoi were sold between RM30 and RM40psf

compared with RM20 and RM25psf in the last two

years.

The total transaction value of all industrial properties

decreased in 2008 but picked up again in 2009 onwards.

Traditional industrial properties in typical industrial

parks have lost its lustre as the industrial sectors have

shifted to greener, cleaner and higher value added

manufacturing technologies. Future growth will be

consistent along these lines.

Source: JPPH

Source: JPPH

Source: JPPH

17

Volume of Transaction by Type of Industrial Properties in Johor Bahru

Value of Transaction by Type of Industrial Properties in Johor Bahru

18


Market Watch

The Senai Industrial Area is 800 acres in size and is

divided into 4 main parcels. It is in close vicinity to the

Senai International Airport, making in accessible by

major highways such as the North-South Highway and

the Second-Link Highway.

The Southern Logistics Industrial Cluster (SiLC) is the

newest industrial area launched promoting clean &

green industry. It was originally sold at RM21psf in 2006

and the present asking price is RM45psf that shows a

115% value appreciation. This could be due to its

unique green features, enhanced accessibility, its

managed industrial park concept, and its close

proximity to Tuas, an industrial zone in the western part

of Singapore. Gelang Patah Industrial Area is also

located in Nusajaya near to the Port of Tanjung Pelepas.

The Tebrau Industrial Area is surrounded by mature

residential developments that provide ample supply of

manpower and its location in between two major ports

in Johor, Port of Tajung Pelepas and Tanjung Langsat

Port.

Located in the Eastern Gate Flagship Zone is the Pasir

Gudang Industrial Area covering 3,764 acres of land. It

is near the Pasir Gudang Port and Tanjung Langsat Port

Distribution of Selected Existing Industrial

BioXCell, a biotech park on 32.37ha in SiLC Clusters (SiLC), is

developed by Malaysian BioXCell Sdn Bhd applying green

industrial technology in Nusajaya. Green Industry produces

environmental-friendly products and promotes recycling the

waste of work process and waste energy while reducing or even,

eliminating dependence on oil, green house emissions and toxins.

Senai Airport Freezone

Gelang Patah Industrial Park

Pelepas Free Zone


Senai High Tech Park

Tebrau Industrial Area

Pasir Gudang Industrial Area

Southern Industrial Logistics

Cluster (SiLC)

Nusa Cemerlang Industrial Park

Senai Industrial Area

Location Property

Type

Asking Price

(2011)

Current

Price

%

SiLC Land RM35psf RM45psf +28%

Senai Industrial Park Terraced RM68psf RM76psf +12%

Nusa Cemerlang Industrial Park Semi-D RM145psf RM190psf +31%

Pasir Gudang Industrial Detached RM47psf RM52psf +10%

Capital Appreciation in Selected Industrial Properties


Existing Industrial

Technology Park

19


Projects which are strategic and/or catalytic to the

development of Iskandar Malaysia that bring extensive

economic linkages can be considered for a customized

package of incentives based on the merits of each

project.

The ISP also caters for developers (companies that are

carrying out construction works) and development

managers undertaking physical development activities

in Medini. Approved developers will be entitled to:

� Exemption from income tax up to year of

assessment 2015 on statutory income from

the disposal of any right in or over land within

Medini;

� Exemption from income tax up to year of

assessment 2020 on statutory income from

the rental or sale of buildings within Medini;

and

� Exemption from compliance with withholding

tax provisions (up to 31 December 2015) on

payments made to non-residents for services,

interest and royalties.

In addition, approved development managers will be

entitled to exemption from payment of income tax on

statutory income from the provision of management,

supervisory or marketing services to an approved

developer until the year of assessment 2020.

While the incentives are directed toward attracting

investors to the region until 2015, efforts are done to

retain existing investors in Iskandar to maintain its

competitiveness in the region

Iskandar Malaysia - Incentives

VARIOUS INCENTIVES AND BUSINESS-FRIENDLY REGULATIONS PROVIDE

THE PROMISE OF EXCITING BUSINESS OPPORTUNITIES IN ISKANDAR MALAYSIA

19

In Iskandar Malaysia, the Incentive Support Package

(ISP) targets 6 sectors which are Education, Healthcare,

Creative, Logistics, Tourism and Financial Advisory &

Consultancy Services.

Fiscal incentives in the ISP for IDR Status Companies

(activities approved under Iskandar Development

Region) that commence their activities before

December 31, 2015 in Medini are as follows:

� Tax exemption on statutory income for a 10

year period, commencing from the date the

company commences operations in Medini;

� Exemption of withholding tax provisions on

payments for services and royalties to non-

residents for a period of 10 years, from the

date of commencement of operations in

Medini. Each foreign knowledge worker

employed by an approved ISP company is

eligible to apply for a duty free car for his or

her own personal use.

Non-Fiscal incentives include the exemption from

Economic Planning Unit (EPU) property acquisition

guidelines, flexibility under the exchange control

requirements administered by Bank Negara Malaysia

(Central Bank of Malaysia) and the flexibility to recruit

foreign expatriates based on IRDA expatriate post

guidelines. Companies undertaking promoted activities

or activities in promoted locations will continue to be

eligible for the nationwide incentives that exist in the

country such as that provided by the Malaysian

Investment Development Authority (MIDA) and other

sector promotion agencies.

20


Further clarification, assistance and information can be addressed to Head, Iskandar

Service Centre (ISC). ISC is a division within IRDA and is a single point-of-call for

investors in Iskandar Malaysia to obtain approvals for various aspects of development.

ISC acts as a principal coordinating and facilitation agent on behalf of relevant

Government agencies in relation to receiving, processing and expediting the requisite

approvals. ISC can be reached via telephone, fax, mail or e-mail at the following

address:

Head, Iskandar Service Centre (ISC)

Iskandar Regional Development Authority

#G-01, Block 8

Danga Bay, Jalan Skudai

80200 Johor Bahru

Malaysia

Toll free : 1 800 88 3010

Telephone : (607) 233 3000

Fax : (607) 233 3001

E-mail : [email protected]

Website : www.iskandarmalaysia.com.my

Any queries related to this publication, kindly email to [email protected]

Formed in 1976, Rahim & Co is one of Malaysia's largest real estate consultancy firms

with current staff strength of over 300 and 17 offices nationwide. Rahim & Co is an

International Associate of Savills plc, one of the world’s leading real estate

consultancy firms listed on the London Stock Exchange. Through the association,

SavillsRahim&Co has more than 200 affiliated offices worldwide providing a

comprehensive range of services encompassing all aspects of real estate:

� Property Valuation

� Research & Advisory

� Real Estate Agency & Brokerage

� Property & Facilities Management

� Project Management

� Investment Consultancy

Contact us to find out how we can service your property needs.

Rahim & Co Chartered Surveyors Sdn. Bhd.

Level 17, Menara Uni.Asia

1008, Jalan Sultan Ismail

50250 Kuala Lumpur

Malaysia

Telephone : (603) 2691 9922

Fax : (603) 2691 9992

Website : www.rahim-co.com

Contact Us

This publication is a joint-effort between Iskandar Regional Development Authority and Savills Rahim & Co.

c

Iskandar Regional Development Authority (IRDA) 2012

All rights reserved. No part of this document may be reproduced, stored in retrieval system, transmitted in any means (electronics, mechanical, photocopying, recording or

otherwise) without the permission of the copyright owner (IRDA). All information within this publication is correct at point of writing. This publication highlights only selected

projects to provide general property market condition in Iskandar Malaysia. Data included in all charts and tables are derived from Valuation and Property Service

Department, Ministry of Finance as well as from Rahim & Co’s database. Information in this publication is not to be taken as forming any part of the resulting contract, nor to

be relied upon as statement or representation of fact. Whilst every care is taken in the preparation, the Owner accept no liability as to their accuracy.

21


Rahim & Co Head Office – Kuala Lumpur

Level 17, Menara Uni.Asia

1008, Jalan Sultan Ismail

50250 Kuala Lumpur

Malaysia

Tel : (603) 2691 9922

Fax : (603) 2691 9992

Website : www.rahim-co.com

Contact : Senator Dato’ Abdul Rahim Rahman E-mail: [email protected]

Rahim & Co – Johor Branch

Unit 19A, Level 19 Metropolis Tower

Jalan Dato’ Abdullah Tahir / Jalan Tebrau

80300 Johor Bahru, Johor

Malaysia

Tel : (607) 333 7166 / 333 7170

Fax : (607) 331 7201

Contact : Loo Kung Hoe E-mail: [email protected]

ASIA PACIFIC HEADQUARTERS

23/F Two Exchange Square, Central, Hong Kong

Tel : (852) 2842 4400

Fax : (852) 2868 4386

Contact : Robert McKellar

Savills (Hong Kong) Limited

Tel: (852) 2842 4534 Fax: (852) 2860 6738

Contact: Raymond Lee E-mail: [email protected]

Savills-Japan

Tel: (81) 3 5562 1700 Fax: (81) 3 5562 1705

Contact: Christian Mancini E-mail: [email protected]

Savills-Singapore

Tel: (65) 6536 5022 Fax: (65) 6538 5540

Contact: Chris Marriott E-mail: [email protected]

Savills-Australia

Tel: (61) 2 8215 8888 Fax: (61) 2 8215 8899

Contact: Paul McLean E-mail: [email protected]

Savills-New Zealand

Tel: (64) 9 307 5523 Fax: (64) 9 303 1689

Contact: Peter Thompson E-mail: [email protected]

Savills-North America (New York)

Tel: (1) 212 328 2800 Fax: (1) 212 328 2828

Contact: John D.Lyons E-mail: [email protected]

Savills-United Kingdom/Europe/South Africa

Tel: (44) 207 499 8644 Fax: (44) 207 495 3773

Contact: Jeremy Helsby E-mail: [email protected]

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