Concerns prevail, but Iskandar slowly taking shape

Since the company she was working for, NGK Machine Tools, opened a new facility in Iskandar last May, Ms Angela Pang, 50, has been living in a rented apartment at Danga Bay not far from the Causeway. She says that this is the “happiest she has been in her 30-year career”. Having worked in Singapore and Kuala Lumpur, she says “Iskandar Malaysia is a lot more tranquil”, and she saves more money to boot.

Ms Pang is not the only one satisfied with her lot.

There is also 11-year-old Oliver Grubb, a pupil at Marlborough College, who moved from Singapore a year ago. He does not miss Singapore, he said. “The sense of community here is much better. We live much nearer to each other, and we can spend time with each other after school. In Singapore, everyone lives in different areas.”

According to figures from the Iskandar Regional Development Authority (IRDA), the region’s population is now 1.8 million, up from 1.6 million in 2014 and 1.45 million in 2005. It has taken in RM222.4 billion (S$71.3 billion) of investments as at Dec 31 last year, exceeding its initial target of RM149 billion. Some 702,000 jobs have been created, with about 15 per cent of the jobs involving skilled workers, said IRDA.


Oliver is part of a growing community of students and their families attracted to the international schools in Iskandar, improving its vibrancy.

From a student body of just 78 in 2011, the EduCity hub in the Iskandar Puteri zone now boasts more than 4,000 students.

Ms Joanne Oei, EduCity’s managing director, said that she projects a rise of 20 per cent in the student population next year, with several schools expecting to increase their enrolments.

At least two more schools will open in the region soon. The Malaysian outpost of private education institute MDIS Singapore will be operational by the third quarter of this year, bringing the total number of schools in EduCity to nine. American boarding school Shattuck St Mary will be the first school in Chinese developer Country Garden’s mega US$100 billion (S$138 billion) project Forest City. It will open in August next year, with an expected initial enrolment of 150 students.


Anecdotally, the president of the Singapore Manufacturing Federation (SMF), Mr Douglas Foo, reckons that more Singapore manufacturers have expanded or moved operations into Iskandar. There were more than 300 Singapore manufacturing projects in the region in 2012, according to IRDA.

Mr Foo added that SMF organises four to five trips to Iskandar Malaysia annually with at least 20 companies taking part on each trip.

One key project benefiting from the demand for industrial space is the Nusajaya Tech Park, developed jointly by Malaysian developer UEM Sunrise and Singapore property player Ascendas.

Sited in the Iskandar Puteri zone, the first batch of 21 factory facilities was completed in February last year and is almost fully sold, while the second batch of 22 units will be completed in the next quarter. Singapore-based companies make up 67 per cent of the units committed to, the developer added.

The tech park spans 210ha and construction has started on only 28ha.

A visit by The Straits Times on a weekday saw a handful of companies in operation, with the majority of units appearing empty.

The managing director and chief executive of Singapore-listed crane operator Tat Hong, Mr Roland Ng, said the firm has invested about RM100 million to date, and has profited from its purchases of industrial land in the Southern Industrial and Logistics Clusters in Iskandar Puteri, which it sold in 2013. But he noted that it was becoming more challenging to invest there.

“Due to increasing competition as Iskandar is maturing, challenges faced include limited opportunities to acquire good sites,” he added.

Likewise, Singaporean household brand Old Chang Kee purchased its factory unit in Iskandar Malaysia in 2011, although it began operations only in late 2015 as it was deliberating on key business decisions.

It is in talks with the Agri-Food and Veterinary Authority (AVA) to import meat products, such as its famous curry puffs, into Singapore. Meanwhile, it produces and researches on non-meat products in Malaysia.

Mr Song Yeow Chung, the company’s group financial controller, said the Malaysian premises have helped to expand its product range but noted that hiring has been a challenge, “as the talent pool tends to congregate in Singapore and Kuala Lumpur”.


But caution reigns. Investors remain spooked by an onslaught of large Chinese investments beginning in 2013, followed by cooling measures announced in 2014.

At the height of the hype surrounding Iskandar, 49 high-rise residential projects were launched in 2013. Last year, the number of launches fell to just two and both were by Chinese developers.

While construction for some of the residential projects is still in full swing, other projects have been put on ice.

A joint project by CapitaLand, Temasek Holdings and Iskandar Waterfront Holdings for a 28.7ha township in Danga Bay was announced in 2013 but little has been heard of it since.

Others, like Rowsley, a firm controlled by Singaporean billionaire Peter Lim, have had to review their plans. Rowsley’s Vantage Bay project was repositioned in 2015 from a residential, office and retail project to a healthcare hub. It is currently seeking approvals.

The number of high-rise apartments sold in Iskandar Malaysia was 2,243 at its peak in 2014, but fell by more than 20 per cent to 1,756 last year, figures released by Malaysia’s Valuation and Property Services Department last month show.

Analysts say that property prices have dipped, and rental yields are expected to fall further.

There will be an influx of completed units this year, with at least 37,000 in the Johor Baru city centre area and more than 11,000 in the Iskandar Puteri area.

Rental returns would be largely affected in these areas as potential tenants would be spoilt for choice in areas like Medini, Puteri Harbour or Johor Baru city centre,” she added.


The Straits Times visited various areas in the newly developed Iskandar areas, such as Puteri Harbour, Danga Bay and Medini. Those with eateries saw fair footfall on weekends, like Puteri Harbour which had a reliable stream of tourists. Eateries like Old Town Coffee and pubs similar to those seen in Robertson Quay here in Singapore were at almost full capacity during peak hours. Both Starbucks outlets in Puteri Harbour and Danga Bay were about a third full at peak hours.

Legoland is popular with Singaporeans, especially during the school holidays.

But some projects can feel eerily empty. Residents of a high-rise condominium in Danga Bay, Tropez Residences, said that they had few neighbours. The project was completed more than a year ago.

Mr Azuan Muda, a 39-year-old Malaysian who works in technology, has been renting a unit in the condominium for four months. He noted that there are many units in the project being put on Airbnb as rental properties, and that only two or three of the 10 units on his floor seem to be occupied.


A key concern is whether the region can generate the jobs and critical mass to sustain its development.

People need an economic or social reason to be there, such as family or jobs. When you create a new township with no shared history and no sense of community, and the impetus is only that the land is cheap, people who move in will eventually move out.

Still some are optimistic that the proposed High Speed Rail and Rapid Transit System that will connect Kuala Lumpur and Singapore, and Johor Bahru and Singapore, respectively, will catalyse population and business growth in the region.

These inflow investments and infrastructure development will hopefully bring in more jobs and generate higher income in Iskandar Malaysia.


Adapted from: The Straits Times, 22 May 2017


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