Iskandar to benefit from Singapore-Malaysia relationship

Living in Johor. Another validation from Analyst. Good for us! 

Sep 12, 2011 - HomeGuru.com.my

Fund managers in Singapore see the enhanced bilateral relationships between Malaysia and the city state as the key driver of development in Iskandar Malaysia.

According to Quah He Wei, an analyst from HwangDBS Vickers Research Sdn Bhd, feedback from fund managers revealed that most of them would encourage their clients to invest in the region.

He added that the Singapore government has been asking its investors to look at Iskandar through initiatives such as Temasek Holdings’ joint venture (JV) with Khazanah Nasional Bhd to develop a “wellness township” in Nusajaya.

“About three week ago, we organised a field trip to Iskandar for the first time for more than 40 fund managers from the republic,” Quah informed the StarBiz.

He added that based on a survey, 53 percent of the fund managers approved the Iskandar’s development progress while 41 percent were neutral.

The survey also revealed that 64 percent would likely invest in Iskandar properties within the next two years and that 72 percent chose to acquire landed properties in Nusajaya, as the area canaccommodate various major projects.

Quah noted that the quality and pricing of housing properties in Nusajaya were the primary attractions.

“But Nusajaya still lacks critical mass and investors are likely to come in only in 2012, which is the tipping point with the completion of the projects,” he said.

Situated in the southernmost part of Johor, Iskandar has a total land area of 2,217 sq km. The other four flagship development zones are the Eastern Gate Development Zone, Johor Baru City Centre, Senai-Kulai and Western Gate Development Zone.

Dijaya buys 92ha in Johor for mixed development

http://www.btimes.com.my

By Ahmad Fairuz Othman
Published on 16th August 2011


NUSAJAYA: Dijaya Corp Bhd yesterday bought 92ha of land in Plentong, Johor Baru, for RM220 million, which it intends to use for a mixed development township with an estimated gross development value (GDV) of RM2.8 billion.

"The landed properties will have prospects for strong price appreciation in the future," said Dijaya's group chief executive officer Tan Sri Danny Tan Chee Sing.

He also said that Dijaya, which is known for its flagship Tropicana Golf and Country Resort, Tropicana Indah Resort Home and Tropicana City in the Klang Valley, is on the lookout for new investment opportunities.

The deal yesterday was Dijaya's second major land purchase in Johor within a year.

Last August, the property developer bought a 15ha plot fronting the straits of Johor for its Tropicana City @ Danga Bay project.

On Tropicana City @ Danga Bay, Tan said the soon-to-be launched project has a GDV of RM3.8 billion. It will comprise office and commercial blocks, as well as hotel, shopping and world-class lifestyle properties.

With the two land purchases, Dijaya has to date invested RM528 million in land banking at Iskandar Malaysia.

"We are on an expansion strategy in the southern region ... We will continue to bring our brand value to a wide spectrum of emerging markets and potential customers," said Tan.

The 92ha freehold land was acquired by Magical Heights Sdn Bhd, a joint venture between Dijaya's wholly-owned subsidiary Accroway Sdn Bhd and Iskandar Waterfront Sdn Bhd (IWSB), from Trident World Sdn Bhd.

The Johor state government thus has an interest in the transaction as Kumpulan Prasarana Rakyat Johor owns a substantial stake in IWSB.

Menteri Besar Datuk Abdul Ghani Othman, who witnessed the signing of the joint-venture agreement yesterday, said the deal would bring in more development to the outskirts of Johor Baru.

Smart city deal to boost Nusajaya property prices

http://www.btimes.com.my/

By Sharen Kaur
Published on 28th July 2011


KUALA LUMPUR: Property prices in Nusajaya in Iskandar Malaysia, Johor, are expected to rise further as UEM Land Holdings Bhd and Iskandar Investment Bhd (IIB) plan to transform the area into a "smart+connected" community.

In the last five years, property prices had increased by 10 to 30 per cent in East Ledang, Nusa Idaman and Horizon Hills in Nusajaya, said UEM general manager for strategic marketing, Zamri Ibrahim.

He said houses sold at RM300,000-plus in Nusa Idaman in 2008 are now selling at more than RM400,000 each. Those launched in East Ledang around the same year have seen price increases of RM500,000 to above RM600,000.

"Turning Nusajaya into a smart city will enhance the offerings in the market which would see the value of the properties appreciating," Zamri said.

UEM owns 4,208ha of land in Nusajaya, a key component of Iskandar Malaysia. It is responsible for the development of five catalyst projects - Kota Iskandar (Johor state new administrative centre), the Southern Industrial and Logis-tics Clusters, the Puteri Harbour waterfront development, Afiat Healthpark and Nusajaya residences.

UEM and IIB yesterday signed a collaboration agreement with network system provider Cisco to develop an information and communications technology (ICT) and services smart city masterplan for Nusajaya.

UEM and IIB will ride on Cisco's smart+connected community platform, which is the next generation of community development where cities are connected from an ICT stand- point.

This will be the first smart+connected community development for Malaysia where services from retail to banking will be offered in an integrated manner.

UEM managing director and chief executive Datuk Wan Abdullah Wan Ibrahim said a 12-week study is being undertaken, starting yesterday, to deliberate on its next step for the transformation plan.

"There is a lot of space to introduce ICT at Nusajaya, at global standards," Wan Abdullah said after the signing.

Rising prices in Singapore has investors eyeing Malaysia

5th August 2011
http://www.property-report.com/

As real estate prices in Singapore continue to spiral upwards, investors of the city-state are beginning to turn their attention towards cheaper pastures. According to recent research from Property Guru, as many as 37 per cent of respondents in a survey of Singaporean investors said that they are considering investing in the housing market of northern neighbor Singapore, says the International Business Times.

The 37 per cent figure makes Malaysia the most popular international destination for Singaporean buyers, and with good reason. Speaking with Channel News Asia, director of Singapore Tenancy Management Tom O’Reilly praised the Malaysian property market. “Malaysia as a country has extremely strong fundamentals and the property market in Malaysia tends to be a lot less volatile than Singapore,” he said.

In addition to the 37 per cent eyeing Malaysia, nearly half of the study said they would consider not just investing, but outright purchasing property outside of Singapore.

Johor second half outlook positive

08 AUGUST 2011

THE outlook for the Johor property market is likely to remain positive in the second half of the year based on the number of property transactions taking place in the state.

Johor Real Estate and Housing Developers Association (Rehda) branch chairman Simon Heng says its members who took part in the Malaysia Property Expo (Mapex) events recorded a 15% increase in sales.

Some 33 developers who participated in the four-day event held in last November raked in RM331mil in sales over a one-month period and the figure jumped to about RM384mil in Mapex held in May 2011.

“Our members reported better sales in the first half of the year and expect the momentum to continue in the second half of 2011,'' Heng says in an interview with StarBizWeek.

The 30-day period starting from the first day of Mapex is the benchmark used by Rehda to determine the value of sales by participating developers. There were several contributing factors that drove demand for properties in the Johor property market this year especially in the Johor Baru district.

As the pulse of the state, the Johor Baru district has the highest concentration of Johor-based and non-Johor-based developers compared with other districts such as Batu Pahat, Kluang, Muar and Segamat.

Sweetener: Johor Baru’s close proximity with Singapore has attracted buyers to properties in Iskandar Malaysia.

Price uptrend

“Many property buyers in Johor Baru are anticipating prices of properties will rise and have decided to make their purchase before the prices escalate again,'' says Heng.

He says the economic recovery meant that consumer confidence was returning after a two-year low period following the global recession sparked off by the US subprime crisis and European financial woes in 2008 and 2009.

Iskandar Malaysia, Heng says, is another main factor that contributed to the positive growth in the Johor Baru property market as it helps to boost demand for houses in the area.

Prior to the inception of Iskandar Malaysia in November 2006, demand for high-end residential properties was best described as lacklustre, but now demand for such properties is on the uptrend. It is common to see developers with projects in Iskandar Malaysia selling their double-storey link-house from RM350,000 up to RM450,000 each. The units are selling like hot cakes.

“Shophouses are also selling well and reports from our members show that a lot of buyers from Kuala Lumpur are buying the shophouses as investment,'' he says.

Heng: ‘Shophouses are also selling well.’

Heng says many of the buyers consider prices of shophouses in Johor Baru are much lower than those in Kuala Lumpur and that they would make good investments in view of the development taking place within Iskandar Malaysia.

Iskandar Malaysia covers 2,219 sq km located in the southernmost part of Johor and divided into five flagship development zones the Johor Baru City Centre, Nusajaya, Eastern Gate Development, Western Gate Development and Senai-Kulai.

Heng says even prices of properties in the Senai-Kulai area, on the northern part of the Johor Baru district which was one described as “hulu” or remote, are going up due to better accessibility and connectivity. A single-storey terrace house at Bandar Putra Kulai by IOI Properties Bhd launched in June 2010 was priced RM130,000 each and sold for RM200,000 in June this year. The two-storey link house in the same housing scheme which was sold at RM189,00 a unit in June last year, was going for RM269,000 each in June this year.

“Iskandar Malaysia is now gaining momentum with many ongoing projects by both the public and the private sectors at several stages of development,'' says Heng.

He says the completion of the New Coastal Highway, the Eastern Dispersal Link Expressway and the Southern Link next year would improve accessibility and connectivity within Iskandar Malaysia; hence help to push demand for properties.

The Kempas-Tebrau, Mount Austin, Nusajaya and Kulaijaya areas are expected to be the property hot spots with several projects to be launched within the next one to two years.

Investment boost

Meanwhile, KGV International Property Consultants (M) Sdn Bhd director Samuel Tan Wee Cheng says the property sector constitutes 30% of the total committed investments while the manufacturing sector makes up about 40%.

He says although the Iskandar Regional Development Authority (Irda) wants the services sector to be the forefront, the manufacturing and the property sectors are still the main contributors to the cumulative investments in Iskandar Malaysia.

Irda chief executive officer Ismail Ibrahim says that as of June 2011, Iskandar Malaysia has received about RM95bil in committed investments, up from RM73bil in the first quarter of the year.

He says that while Iskandar Malaysia is a main factor that pushed demand for high-end properties, the stakeholders must ensure that buyers who could not afford them are not left out.

“It is good for developers to be able to sell high-end properties especially to foreigners but we need to have a balanced approach to ensure locals are not sidelined in the name of progress,'' says Tan.

Rising demand

He says demand for properties in Johor Baru was up in the first half of the year as many prospective buyers missed the opportunity to buy the properties at lower prices due to the 1998 and 2009 economic recession.

Typically, buying a property would be the last option most people would consider committing to during economic uncertainties given concerns over job security.

“The moment the economy starts to show signs of recovery, those who missed the boat earlier will invest in properties as properties are always a good hedge,'' he says.

Tan says confidence in Johor is now at all time high especially with the progress made by Iskandar Malaysia since its inception five years ago, although many are sceptical in the early days on whether it would take off successfully.

Tan says the property sector constitutes 30% of total committed investments.

He says that as the Government-backed economic growth corridor in the country, Iskandar Malaysia has strong backing from the Government in terms of funding for infrastructure development projects.

“Road upgrading and new road projects within Iskandar Malaysia will improve accessibility and connectivity and buyers will look at other locations which were previously unpopular,'' says Tan.

For instance, Rawang and Shah Alam in Selangor used to be out of the radar among property buyers in the Klang Valley but now, buyers are flocking there as better infrastructure has turned them into preferred locations.

Tan says foreign investors, who were largely interested in Singapore and the Klang Valley, are also gradually turning their gaze to Iskandar Malaysia. A definite sweetener is Johor Baru's close proximity with Singapore which has attracted buyers especially Singaporeans to properties in Iskandar Malaysia. “Like it or not as close neighbours, Johor and Singapore complement each other in economic activities due to a long history of economic interdependence,'' says Tan.

With the republic's investment arm Temasek Holdings showing its serious commitment to invest in Iskandar Malaysia, more Singapore property players such as Mapletree and CapitaLand would likely invest in the property sector here.

Tan hopes that the Government will take a proactive step to correct the misconception that Iskandar Malaysia is Nusajaya as there are other areas that need equal attention in terms of infrastructure projects and investment flows.

Iskandar Malaysia could rival KL for property investors

Homeguru.my
August 4th


As property prices in Singapore hit their peak, more investors from the Republic are venturing into overseas property, with Kuala Lumpur as one of their favourite destinations.

However, Khalil Adis, a property expert and regular contributor to HomeGuru, believes “there is a limit on how much capital appreciation properties in KL can achieve as the property market has become too saturated.”

He noted that the next frontier in property investment is Iskandar Malaysia.

Although still a relatively new and untested market, Khalil said, “Iskandar Malaysia will rival Kuala Lumpur and set the benchmark for real estate in Malaysia.”

Many property developers are now acquiring land parcels in Iskandar Malaysia for development and more property launches are also in the pipeline, including the launch of 1Medini Residences in Medini North this year and the completion of the new Coastal Highway.

Newcastle University Medicine Malaysia (NUMed) in EduCity has already opened its doors and three more developments — Netherlands Maritime Institute of Technology, the International Student Village and a stadium and sports complex — are set to open this year.

“Next year, LEGOLAND Malaysia will be officially launched, where a MRT station has already been planned next to it,” said Khalil.

In addition, the Singapore and Malaysian government have signed a deal to improve connectivity between Singapore and Iskandar Malaysia, which will boost investors’ confidence.

“Come 2018, this region will be buzzing once the planned Rapid Transit System (RTS) between Singapore and Johor Bahru, served by a single co-located CIQ facility, is completed.”

Recently, Singapore's Land Transport Authority (LTA) announced the extension of the country's East-West MRT line to Tuas, as well as the plan to build a station in Woodlands that will integrate the upcoming Thomson Line (TSL) with the proposed RTS link between Singapore and Johor Bahru.

“This will increase accessibility across the Johor-Singapore Causeway between Tuas, Woodlands and Johor Bahru,” Khalil said.

“With tourism and education as among the key drivers of the region’s economy, the Malaysian government has this time shown a lot more follow through to ensure the success of Iskandar Malaysia.”

Buying residential property in Malaysia — Aileen Han

JULY 8 — There is growing interest among Singaporeans in investing in residential properties outside the country following the fourth round of property market cooling measures announced in January.

The measures include increasing the holding period for the imposition of seller’s stamp duty to four years and lowering the loan-to-value-limit to 60 per cent on second and subsequent mortgages.

With a bullish Singapore dollar, favourable financing terms, geographical proximity, similar culture and background and, most importantly, family ties, Malaysia remains one of the top favourite property investment destinations for Singaporeans.

To help first-time investors, here are some things you should know about buying a residential property in Malaysia.

Know the type of property you can own

Malaysia allows foreigners to own an unlimited number of leasehold and freehold properties, subject to state consent. However, some are prohibited:

• Properties valued below RM500,000 (S$203,760)

• Land or properties with “Malay Reserved” status

• Agricultural land (unless above five acres and for commercial purposes)

• Properties assigned under Bumiputera quota

Market research

The Internet is a boon. So start your journey by finding out about the developer. Is the developer reputable, in strong financial standing and regulated by the government? Established developers are more likely to see through the progress of a project successfully, financial crisis or not.

If you find the price too good to be true, chances are the Internet will tell you why. Sieve through the clutter and learn from those who have gone through the pain.

Determine your budget and know yourself

While market research helps in making informed investment decisions, it is also crucial that investors know themselves.

Ask yourself the following questions:

• What is my budget and what are the financing options available to me? Malaysian banks offer as high as 90 per cent financing, so with a minimum 10 per cent outlay, you will be able to own a property quite easily. The question is: when do you start servicing your loan?

At property launches, developers often offer the Developer Interest Bearing Scheme (DIBS), which means it will bear the interest payable to the bank. So, besides the 10 per cent upfront downpayment, you would not have to pay anything until the date of completion.

But once the property is at an advanced stage of construction, DIBS is no longer offered and you will have to start servicing your loan. Some developers also absorb legal fees for the sales and purchase agreement, loan agreement and stamp duty. Combined, these can be great savings for many, so be sure to ask.

• How much do I have as buffer? The property price aside, you need to set aside some money for legal fees, documentation, monthly maintenance fees, renovation/furnishing costs, annual taxes, etc. In some cases, you may even need to start servicing your bank loan interest.

• What is the purpose of this purchase? Is it a short-term flip or part of a long-term plan that may see it becoming your home during retirement?

• Where am I right now? While risk tolerance is a key factor in an investor profile, so too are an individual’s personal circumstances.

Where an individual is at different stages of one’s life greatly influences the risk/return decisions that are made.

If you are young, chances are you will be in the accumulation cycle (building a home, starting a family, saving for an emergency fund, etc), you should focus on relatively high-risk, high-return and capital-gain oriented assets. However, if you are in your mid to late stages of your career (consolidation cycle), your priorities will change.

By knowing who you are and what you can afford, you are taking a calculated risk to arrive at a better decision.

What are the hidden costs?

Taxes are always a concern for foreign property buyers and the situation in Malaysia is no different than anywhere else.

There is a real property gains tax of five per cent imposed on capital gains of a property that is sold within five years from the date of purchase (the date of the sales and purchase agreement). Property owners are also required to pay the annual minimal quit rent (“Cukai Tanah” in Malay) and the twice-yearly assessment tax (“Cukai Pintu” in Malay) on their properties. The non-resident individual tax rate is 26 per cent and rental income is subject to the same tax rate.

Site visit

Once you have shortlisted your choices, a site visit is key to making the final decision. If the property is yet to be built, walk the streets, speak to locals and find out about the prospects of the area. If the property is in the process of being built, you are in a better position to assess the quality of the building materials, furnishings, specifications, etc.

Update yourself on developments to fully understand the upside potential of the investment. With the Economic Transformation Programme (ETP) in motion to transform Malaysia into a high-income nation by 2020, some areas may be gazetted for future developments (such as railway systems) so it is a good time to ensure the property of your choice withstands the sands of time. — Today

* Aileen Han is country manager for E&O Property (Singapore), part of Malaysia-listed real estate developer E&O Group.