Sunday, September 30, 2012

Expatriates in Singapore buying Johor homes


Published in Straitstimes on 30th September 2012

Some expatriates working in Singapore have moved to live in Johor's Nusajaya area, attracted by lower prices of homes and the extra space there.

They have bought houses to live in and commute to work in Singapore. Many plan to continue working in Singapore for the long haul, but say they moved because their housing allowances were reduced or cut altogether.

Developers and property agents said expatriates began moving to Johor from about five years ago, but the completion of houses and recent opening of international schools in the Iskandar Educity project has raised interest markedly.

UEM Land, the major developer in the area for projects including East Ledang and Horizon Hills, said about half of the buyers for its properties are foreigners, including Singaporeans.

Monday, September 24, 2012

Local firms move operations to Iskandar Malaysia to save cost

Published in Channelnewsasia on 24th September 2012

SINGAPORE: More than 3,500 Singapore businesses have set up shop across the causeway in Iskandar Malaysia over the past six years, with a cumulative investment of more than RM5 billion as at June 2012.

Iskandar Malaysia is a special economic zone in Johor, Malaysia that was launched in 2006. It covers an area of 2,217 square kilometers and is administered by the Iskandar Regional Development Authority, a Malaysian Federal government statutory body.

Over 70 per cent of the businesses are small and medium enterprises.

Fishing equipment supplier Hong Guan started operations in its Iskandar warehouse in May.

Twice as large as its warehouse in Singapore, Hong Guan's 14,800 square feet freehold space cost about S$900,000.

Its local warehouse will shut down next month.

Hong Guan's managing director, Lee Seng Shoy, said: "Singapore will always be our HQ and the brain centre but from a business point of view, we need to be competitive and cost is always a factor. We foresee Iskandar helping us contain our costs and that is something we're leveraging on so we hope that by moving to Iskandar on the logistics side, we are actually enjoying the best of both worlds."

Similarly, Global Capital & Development wants to replicate on a larger scale in Medini, a core development zone in the Iskandar Development Region.

Global Capital & Development, the developer of Medini, is supported by a consortium which includes the Khazanah-backed Iskandar Investment Berhad.

It hopes companies in Singapore and Medini can work together as a single entity to bid for projects.

Global Capital & Development's CEO, Keith Martin, said: "We have Pinewood Malaysia Studios, Medini Media Village and straightaway we went and spoke to the Media Development Authority of Singapore and Mediapolis in Singapore. If you now add up the sum of those parts, it's a much greater proposition. And within a one hour driving radius, we have everything we need to take a TV or film production from a draft script to a full finished product."

With increasing business activity in Iskandar, other firms are moving in with the aim of gaining first-mover advantage.

Shanker Iyer, Chairman, The Iyer Practice's chairman, Shanker Iyer, said: "We think it could be two or three years before this place really starts to get up and running. Initially our main activity would be to offshore some of our less important activities from Singapore to Iskandar. That is actually becoming a need now, because the rising cost of doing business in Singapore, the immigration challenges now, the reduction in S-passes - it's beginning to affect firms like us."

But most acknowledged that concerns remain, such as crime, and the lack of a critical mass of human capital and supporting businesses.
But the authorities are confident the situation will improve.

Iskandar Regional Development Authority's chief executive, Datuk Ismail Ibrahim, said: "As we have seen today, there has been increased bilateral ties between Malaysia and Singapore, and from which the greatest beneficiary is definitely going to be Iskandar Malaysia. We would like to create an environment where both Singapore and Iskandar will see themselves as one destination, not only for investment but for people to work as well as other offerings."

Into its sixth year of development, the Iskandar region in Johor, Malaysia has seen annual investment growth of 8 per cent with Singapore firms accounting for 5 per cent of total foreign investment.


- CNA/ck

Thursday, September 20, 2012

Johor Bahru — a metropolis in the making


Published on New Straits Times on 21st September 2012

Johor‘s real estate market before the rise of Iskandar can best be described as sluggish and uneventful. While Kuala Lumpur has been the epicentre of Malaysia‘s development, Johor Baru has long moved forward at a glacier pace. However, the growth of Iskandar changed all that and has propelled the state into its long overdue growth spurt.
According to Gavin Tee, founder of SwhengTee International Real Estate Investors Club, both Singapore and Johor Bahru have entered into a symbiotic relationship not unlike that of Hong Kong and Shenzhen, a model where both sides leverage on each other to further their respective development agenda.
“I feel that globalisation is the driver behind the formation of such bilateral geographical co-operation which shall pave the way for rapid growth not only in JB, but the whole of Malaysia.”
Iskandar‘s arrival was in line with the trend towards a borderless world and will seed the growth of JB’s real estate development. Like China’s economic development over the past two decades, the Malaysian government’s efforts, planning, and financial support are key to revitalising JB’s sluggish market to enable the state to compete in the global market.
“Iskandar — a stroke of genius”: “The launch of Iskandar was a stroke of genius and the government has shown its determination by announcing to the world the formation of Medini,” stresses the property consultant.
He adds that first impressions are the game changer, and the large infrastructure investment and open policies helped massively in attracting foreign direct investment. Investor-friendly policies and an open real estate market paved the way for expatriates and foreign properties buyers.
In addition, healthcare, creative-based education and business activities are strongly encouraged and these efforts have resulted in explosive growth in Iskandar. Despite many Johoreans‘ initial pessimism of the project, Iskandar has taken off in a big way and has managed to grab the world‘s focus on this up and coming economic hotspot.
“The biggest foreign involvement comes from our southern neighbour and the rise of Iskandar saw unprecedented levels of involvement from Singapore. Investments started flowing in from the island republic and the Singaporean government actively encourages its people to invest in the region,” Tee reveals.
Other major investors include South Korea, Japan, China, and Europe, making JB a truly global city. The rise of JB in the international circuit is beyond the wildest dreams of Johoreans in the past, but the reality is now and many are hoping for Iskandar to remain open and innovative so as to keep in pace with global developments and become an integral part of the global system.
“Many people in Kuala Lumpur do not understand the situation and the level of interest shown in Iskandar. My own interest in Iskandar is due to the number of enquiries I get from Japanese and Chinese investors on whether they should put their money in Kuala Lumpur or Iskandar,” reveals Tee. “The sheer volume of interest prompted me to start studying Iskandar region actively some six months ago and my investigations led me to conclude that Iskandar is the real estate hotspot for next year.”
“I personally believe that JB is poised to take the crown as the investment hotspot for 2013 and the sleeping dragon is ready to move.”
“Sleeping dragon ready to move”: According to figures from REHDA (Real Estate and Housing Developers‘ Association Malaysia), the real estate prices in JB has rose by merely 0.6 per cent over the past 20 years and the past decade was particularly slow with barely any appreciation. Tee believes that the prices will boom soon and the prices will rise to unprecedented levels rapidly.
Other than the overall trend towards globalisation acting as a crucial external push factor, the various investment friendly policies by the government also serves to pull in investments. The government has invested significantly to improve the infrastructure as lack of proper infrastructure, including roads and communication network are major stumbling blocks to development.
“World class infrastructure has enabled Iskandar to compete with other established investment hubs across the region and it is the single largest investment of its kind in Southeast Asia.”
Iskandar‘s success hinges on some keys components and Tee believes that the main challenge is to attract people to stay here for longer periods of time. One of JB‘s biggest problems is that many Singaporeans come here for the cheap food and petrol, but do not usually stay for long.
“This ‘come-and-go’ approach significantly slows down the development potential and there is a need to attract them to stay for at least two or three days.”
Challenge to attract talent: The other challenge is to attract talent to set up homes in Iskandar and the government‘s plan is very simple yet effective. Other than encouraging healthcare, education, and innovation-based industries, the entire Medini region was conceived as an open market without FIC (Foreign Investment Committee) restricting foreign buyers from buying houses here, and this 100 per cent ownership will serve as a huge draw for international buyers.
Educity has also successfully attracted many prestigious universities from around the world, including those from Singapore and the United Kingdom, to set up campus here.
“Currently many Malaysians are leaving the country for further education and many of them stayed on after graduating. Educity is set to reverse the trend and to draw in talents from around the world and to make Iskandar their home after they complete their studies.”
The rise of the medical industry will create many jobs for the graduates of MMU and other medical colleges while other major developments such as Legoland and Pinewood Studio will create jobs for those in the service or creative industries.
“Such well thought-out development plan and the positive feedback cycles are chief reasons for my optimism of the Iskandar region. The region will not only attract talent, but groom them, and provide the jobs to retain them. We encourage them to set up base here and to call Iskandar home.”
There is a pressing need to draw in settlers and not just tourists, people who call this place home instead of merely a workplace. The idea goes beyond any single economic or social objective, but signals the birth of a truly global metropolis.
Focus on tourism in 2013: As far as investments are concerned, next year promises to be a good year for regions that target foreign investors and those with a strong focus on tourism.
“Personally I would like to invest in regions with a tourism focus and Iskandar fits the bill perfectly as it was conceived from the onset to attract investments and such global focus lends it a robustness as even if one (investing) country faces problems, another will step up to fill the gap thus making me feel great confidence,” says Tee, citing this as the primary reason for his optimism.
He also cites the government‘s efforts in entering into agreement with many heads of state and investors as confidence boosters knowing that the big boys are committed in bringing in results.
The third reason cited is the generally low price of JB‘s real estate and he believes that the depressed prices in JB properties means huge room for growth and next year‘s focus will be on investments in the area which will propel it to the top.
Huge room for growth: Tee is quick to warn however that despite the rosy picture, the investments are not without caveats and investors need to be wary of pockets of oversupply that might occur in regions which might require time for adjustments.
“This is where investors need to be cautious and properly study the viability of each investment. At five times the size of Singapore, Iskandar is huge and therefore investors need to be prudent in picking the right spot for growth.”
He adds that although Nusajaya is the latest darling for investors, there are still much room for growth in the matured JB Central. Foreigners staying in Iskandar need their food and entertainment and this is where the developed area can cater to their demands. One Terbau and Setia88 are two matured districts with the biggest growth potential, he indicates.
The highways linking Iskandar and JB Central have eased up traffic massively but there is still risk of traffic congestion as the population grows. He hopes that a modern rail service linking Woodlands and the proposed high speed rail between Singapore and Kuala Lumpur can be completed soon as this will truly cement JB‘s position as a metropolis.


Read more: COVER STORY: Johor Bahru — a metropolis in the making - RED - New Straits Times http://www.nst.com.my/red/cover-story-johor-bahru-a-metropolis-in-the-making-1.146219#ixzz2718ryL00

Monday, September 3, 2012

Upbeat views on Malaysian property

Published TheStar on 3rd September 2012

Substantial inflows and outflows of investments expected for this year

GEORGE TOWN: Despite the global economic crisis, property investments coming into the country and going to overseas this year are expected to increase substantially.

The recently introduced 10% stamp duty for foreigners buying properties in Singapore has increased the attraction of Malaysia as a property investment destination.

Property investments flowing to Melbourne, Australia, are expected to increase between 15% to 18% this year from RM125mil in 2011, thanks to new housing loans for the Australian market recently introduced byMalayan Banking Bhd (Maybank).

Property Talk International Sdn Bhd managing director Steven Cheahsaid that foreigners showing interest in Malaysian properties had increased significantly this year, compared with the last three years, due to the recent 10% stamp duty introduced in Singapore for foreigners buying homes.

Tang: ‘Investors from China are big time property purchasers in Singapore.’

“The other reason is that Kuala Lumpur still remain as one of the few South-East Asian cities with attractive property prices.

“Compared to Jakarta, the price for a prime residential in Kuala Lumpur is about 15% lower.

“The buyers are from Indonesia and China and they show preference for Iskandar, Johor Baru and Kuala Lumpur.

“Indonesians prefer Iskandar because it is close to Singapore,” he said.

The Indonesians and China buyers generally go for properties priced between RM600,000 to RM1.5mil in Iskandar and Kuala Lumpur, while in Penang they go for RM1mil above homes, according to Cheah.

The additional direct flights from Jakarta to Penang by Air Asia had also fueled the interest from Indonesia for Malaysian properties, Cheah added.

This year, Property Talk expects to sell about RM55mil worth of properties located in Johor, Kuala Lumpur, and Penang, compared with over RM20mil achieved for 2011.

“Over the past three months, we have sold over RM25mil worth of properties, comprising 35 residential homes located in Kuala Lumpur and Iskandar, Johor Baru.

“We expect to sell another RM30mil worth of properties, comprising 30 to 40 homes, from Iskandar, Kuala Lumpur, and Penang via three more property exhibitions in Jakarta jointly organised by Malaysia Property Incand private developers before the year ends,” he said.
An aerial view of Melbourne. Property investments flowing to the Australia’s city are expected to increase between 15% to 18% this year.

On investments from Malaysia to Australia, Cheah said the loan interest from Maybank was between 4% to 5% per annum compared with 5.7% to 6% per annum by Australian banks.

“This is why we can expect more Malaysians to take up the loan to invest in Melbourne, Australia this year,” Cheah said, adding that the Maybank housing loan was for Melbourne only.

According to Cheah, Melbourne is the top investment destination for Malaysian property investment funds.

“This is because many Malaysians have relatives who have migrated to Melbourne, where you can find a variety of Malaysian food restaurants.

“According to the latest research from Australian Property Monitors (APM), over the last five years, Melbourne has been the standout performer among the major capital cities for house price growth, with prices increasing almost 30% in just 15 months,” he added.

Meanwhile, Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said Henry Butcher had recently set up a property show gallery in Beijing, following the imposition of the 10% stamp duty by the Singapore government for foreigners buying properties in Singapore.

“The gallery, set up two to three months ago, showcases residential properties from Klang Valley, Malacca, and Penang.

“Investors from China are big time property purchasers in Singapore.

“With the 10% stamp duty introduced, Malaysian developers are now trying to attract them over.


“We still need to do a lot of education work in China to promote Malaysia as a property destination, as the awareness is still lacking,” he said.

Tang added there were many enquiries from China investors to buy vacant land to develop residential projects in Malaysia.

“We hope they will undertake development in Malaysia and promote the properties in China.

“This will help to increase more awareness for Malaysian properties in China,” he said.

According to Tang, the global financial crisis which erupted in 2008 and 2009 saw foreign interest for local properties dropped significantly. ”In 2010, we see a return of foreign interest, but the volume and value of property transactions involving foreigners still have not not recovered to anywhere near its peak prior to 2008.

“We believe the pace of investment from overseas will remain flat against last year.

“Besides tapping into traditional sources like Singapore, Hong Kong and Indonesia, Malaysian developers are moving into markets such as South Korea and China.

“China is a vast market and if Malaysian developers are able to educate the investors on the attraction of Malaysian real estate, we may see a surge in foreign interest,” Tang added.

Henry Butcher Marketing director for international marketing Jazmine Goh meanwhile said the global economic crisis had created favourable conditions and opportunities for Malaysians to invest in overseas real estate.

“The economic slowdown in Britain has caused property prices to plunge and coupled with the drop in the value of the pound sterling against the ringgit, properties in the United Kingdom have become more affordable and within reach of middle income Malaysians.

“The mortgage defaults in the United States have also resulted in a lot of opportunities to pick up properties foreclosed by the banks at a fraction of the original price.

“Of course, the fear of the prolonged debt woes in Europe has at the same time resulted in a more cautious attitude being adopted by investors,” Goh said.

The popular investment destinations for Malaysians are Australia, mainly Melbourne and to a lesser extent, Sydney, Perth, Brisbane and Gold Coast as well as London, and Singapore, and more recently, the United States, according to Goh.