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.

Thursday, August 16, 2012

LEGOLAND is on track for launch!

Looks like everything is set for a great launch!




You may visit their official site @ http://www.legoland.com.my

Wednesday, June 13, 2012

Singapore buyers keen on Nusajaya projects


by Cheryl Tay
Singaporean buyers have shown keen interest in Nusajaya (pictured) projects in Johor, which is good news for developer UEM Land Holdings Bhd.
Datuk Wan Abdullah Wan Ibrahim, Managing Director and Chief Executive of UEM Land, said that the recent move to tighten housing regulations in Singapore has impacted purchasing power in the country.
"Generally, our Singaporean neighbours are in favour of higherend developments, especially projects with strong security system, lush green environment and are lifestyle-driven."
In April, the government announced new, tighter rules to ensure that developers would provide accurate sizes and layout of apartments, in a bid to protect buyers less familiar with the property market.
As a result, more Singaporeans are expected to buy in Malaysia due to the tightening regulations in Singapore, according to Steve Melhuish, CEO and Founder of PropertyGuru Group.
He added that property prices have reached an all-time high and slight price declines are pushing Singaporean buyers to invest elsewhere.
Wan Abdulah said, "Approximately 50 percent of our total purchasers in Nusajaya are foreigners while the remainder are Malaysians." UEM Land's Nusajaya is one of five flagship zones in Iskandar Malaysia — the first economic growth corridor in Johor.
The developer has four ongoing projects in the area, namely East Ledang, Nusa Idaman, Puteri Harbour, Nusa Bayu and Horizon Hills, a joint venture (JV) with Gamuda Land Bhd.
"Our luxury garden residences, East Ledang and highend condominium, Imperia at Puteri Harbour received overwhelming response from the Singapore buyers," he added.

Saturday, October 1, 2011

HLIB Research 30 September 2011 (Gamuda; Traders Brief)

Living in Johor remains exciting. How I wished I was already a resident while writing this post. Anyways, some indication on the sales performance of Gamuda in Nusajaya.


Link to actual source


Gamuda (BUY)
Record breaking year
  • FY11 earnings came in at a record high of RM425m (20.7 sen/share), in line with HLIB forecast but 7.6% above consensus numbers.
  • Strong performances from all divisions buoyed Gamuda's earnings to record highs, which grew by 32% YoY. Outstanding active order book fell to RM2.3bn (RM2.1bn from EDTP), translating to only 1.2x FY11's construction revenue. Hence, the MRT tunnelling project is crucial for Gamuda to replenish its order book.
  • Launches in Bandar Botanic, Horizon Hills and Jade Hills continued to do well with some ~RM300m new sales achieved during 4Q11. Unbilled sales remained at ~RM1bn, translating to 1.4x FY11's property revenue. For FY12 property sales target, Gamuda has already secured ~RM350m new sales out of the targeted RM1.35bn in local property sales.
  • As for Vietnam, response has been poor due to the high interest rate environment and the lack of development track records. The management has revised their Vietnam property sales target downwards drastically by >50%, from RM1.5bn to RM650m.
  • FD SOP valuation trimmed by 2.8% from RM3.92 to RM3.81 as we introduced a 10% discount in our SOP valuation to reflect the current risk adverse appetite in the market.

Monday, September 26, 2011

Educity: Ambitious plans to become an Asian hub for Western education


A reverse brain drain

Ambitious plans to become an Asian hub for Western education

Published on 5th May 2011, Economist Print Edition


ONE corner of a foreign field is becoming for ever England. It is in Johor on the southernmost tip of peninsular Malaysia, opposite Singapore. At a site called Nusajaya, workmen are finishing a new campus of Newcastle University. Nearby foundations are being dug for Southampton University. And down the road Marlborough College, one of England’s most famous public (that is, private) schools, is building a Malaysian campus from scratch. If all goes well, the 900-odd pupils will hardly notice that they are looking out over palm-oil plantations rather than the Wiltshire Downs. Within a few years thousands of students will be enjoying an English education in this steamy bit of Asia.

“Educity”, as the Johor complex is called, reflects Malaysia’s grand strategy to become a centre for Western education. The country wants to meet strong demand among Asia’s new middle classes for English-language schooling. It also worries about its brain drain (over 300,000 university-educated Malaysians work abroad). Having watched Asian children flock west to spend a lot of money on British and American schools, the government decided a few years ago to try to reverse the trend. It has campaigned to persuade Western schools and colleges to come and set up branch campuses. The Malaysian proposition to Asian parents is simple and beguiling: come to these famous schools and universities in our country and get the same degrees and qualifications as in Britain or America for half the price.

Australia’s Monash University was the first to set up shop, followed by Britain’s Nottingham University, in 2000. Other Australian universities followed Monash, and in March the Massachusetts Institute of Technology teamed up with a Malaysian body to create Asia’s first Institute for Supply-Chain Innovation. Johns Hopkins University is expected to set up a medical school. The Netherlands Maritime Institute of Technology is already in Educity.

Yet other factors count as well. Malaysia is a former British colony and English is widely spoken. The country has a superficially Western feel to it—ideal for Westerners studying or teaching in Asia, and for Asians who want to acclimatise to Western culture. Meanwhile, Malaysia cleverly markets itself to the Middle East as a relatively relaxed Islamic country where young Muslims can mix together freely and, for a few years, slip the surly watch of the morality police back home.For these Western institutions, the prize is a toehold in the world’s biggest education market. Many have already gone into partnership with or lent their names to schools and universities in Hong Kong, Singapore and Shanghai. But this is the first time so many have been persuaded to build replicas of themselves in another country, a more permanent and riskier proposition. They are doing so largely because the Malaysian government is bearing the start-up costs. Educity is spending about $100m on the infrastructure and buildings.

In return for putting up a lot of money, the Malaysian government wants universities to set up faculties in subjects that will be most useful to Malaysia. The University of Southampton, for instance, will only offer degrees in engineering. But the influx of foreign colleges might have more interesting consequences, too. In order to attract foreign universities, the government has had to waive the restrictive and sometimes racist regulations that govern Malaysia’s own universities. In these places, informal quota systems give preference to ethnic Malays in the faculties of sought-after subjects such as law, medicine and engineering. Students are not allowed to join political parties or protest. Now, local students are demanding to know why they should be subject to these archaic rules when the new students are not. Good question.

Monday, September 12, 2011

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.