Statistics do not lie. The Malaysian and Singapore real estate markets are in a down cycle. You hear stories on how the market is bad and how difficult it is to buy, sell or rent at the prices that you want. Well we all have to remember that the real estate market is a cyclical one and after many years of highs, there will be some years of downs, but the good years will return. It has been proven many atime.
The other thing we should remember is actually the same set of reasons that got us all excited about the Iskandar Malaysia property market back in 2012. And Iskandar Puteri (the former Nusajaya zone) is where many of these economic drivers are based. So how about we catch up on where they are today:
The 300 acre site of Educity started off back in 2012 with only a handful of universities including Newcastle University, University of Southampton and Marlborough College. Today in 2016, we have a few more institutions operating here including University of Reading, Multimedia University & Netherlands Maritime Institute of Technology. There’s also a full fledged stadium and sports facilities for students.
Coming into 2017, the Raffles American School main campus and MDIS Singapore will open as well, adding to the student population that is now hitting close to 3,000 students, up from the few hundred that started out 5 years ago. Enrolments are up and growing as the universities gain credence amongst the local population. MDIS alone is targeting some 2,000 students within 3 years for their Educity campus.
The opening of the Gleneagles Medini hospital in October 2015 was a big milestone for the healthcare industry in Iskandar Malaysia. Despite being Malaysia’s 3rd largest urban zone, Johor Bahru had been late in getting its own Gleneagles hospital compared to other cities in the country.
Healthcare has always been a big opportunity to tap on considering the relatively low cost compared to Singapore, Japan and other Western nations. Singapore has an aging population with a median age of 41 (compared to Malaysia’s 29) to manage and hence Singaporeans are allowed to use their Medisave (a medical program under Singapore’s retirement savings fund) on selected private hospitals in Malaysia. This includes Gleneagles Medini.
The other market opportunity is in medical tourism, especially from Indonesians, Japanese and other Westerners. The results have been good business for Gleneagles Medini hospital, which is now building a separate block for its specialist suites to house specialist doctors, due for completion in another 2 years.
Leisure & Tourism
Tourism figures into Johor have skyrocketed since 2012. This has been driven by tourism destinations such as Legoland & Hello Kitty as well as increased awareness of Iskandar Malaysia as a destination for travellers.
Today there is an acute shortage of quality hotels resulting in a frantic building of new hotels & serviced apartments in Iskandar Putri managed by brands such as Ascott, Pan Pacific, Frasers & Ramada. Driven by the weak Ringgit, Singaporean and Chinese tourists have remained abundant and free spending.
Moving forward, as many as 5 theme parks are in the plans with most of them in Iskandar Puteri. Their realization will only cement Iskandar’s position as the “Orlando of South East Asia”, housing various theme parks in close proximity.
Kota Iskandar, Manufacturing & Port of Tanjung Pelepas
The Johor state administration moved to Kota Iskandar, just off Puteri Harbour in 2011 and today some 6,000 staff work there with the Menteri Besar’s office here. The presence of the state administration in Iskandar Puteri has resulted in increased efforts to develop the region, with plans for the new Johor football stadium and a new state zoo to be relocated here on government land. The state administration has also pushed for increase development of affordable housing in Iskandar Puteri, providing a stable workforce for companies operating here.
And the biggest economic powerhouse in Iskandar is still the manufacturing sector with the industrial parks of SILC and Nusajaya Tech Park growing rapidly. The latest triumph is in a large Korean cosmetics firm planning to set up a major production facility in SILC. Manufacturing growth has also led to increased traffic at the Port of Tanjung Pelepas, that recently hit 11 mil TEU of managed cargo in 2015, making it the top 15 busiest ports in the world.
High Speed Rail to Kuala Lumpur & Singapore
This is actually the BIGGEST long term catalyst for continued economic growth in Iskandar Malaysia and especially Iskandar Puteri. Since its announcement in 2013, many have waited for progress and in July 2016, we finally saw the signing of a detailed MOU and appointing a project delivery partner by October 2016. With a somewhat relaxed targeted completion date of 2026, the High Speed Rail will fix connectivity issues between Singapore and Iskandar Malaysia. This will allow economic spillover from Singapore to happen even faster considering the size of the Singapore economy is almost 10 times that of Johor. It will also connect an estimated 18-20 million population by fast rail, providing boosters to population growth and more economic activity.
If you can remember the above drivers and keep it close to heart, any property investor in Iskandar Puteri should remained confident to stay the course. I remain hugely positive on Iskandar Puteri as the above trends are largely irreversible and almost guarantees huge success at some point in the future. I hope this keeps you motivated and stokes further interest in your quest to ride the Iskandar Malaysia boom.