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Monday, February 16, 2009

Iskandar's RM43bil investment a big boost for Johor

Setia Tropika housing project at Kempas in Johor Baru by SP Setia

ISKANDAR Malaysia will drive the growth of the property market in Johor during the global economic slowdown.

Located at the southernmost part of Johor, it spans over 2,217 sq km covering Johor Baru, Senai-Kulai, Gelang Patah-Pontian and Pasir Gudang-Tanjung Langsat.

It was the first economic growth corridor launched in the country on Nov 4, 2006 and, as at today, had received RM43bil investments from the RM47bil targeted by 2010.

“Iskandar is more viable compared with other economic growth corridors in Malaysia,’’ KGV-Lambert Smith Hampton director Samuel Tan Wee Cheng told StarBiz.

Samuel Tan Wee Cheng ... Johor property market benefits from Iskandar

The other corridors are the Northern Corridor Economic Region, East Coast Economic Region, Sabah Development Corridor and Sarawak Corridor of Renewable Energy.

Tan said that despite criticisms and unfavorable comments from certain quarters on Iskandar since day one, it had been in full swing with the influx of local and foreign investors.

He said the investment in Iskandar would not only spill over to other parts of Johor but would also be of national interest as it was being watched closely by other countries in the region.

Tan said the Johor property market also benefited from Iskandar as demand for high-end residential properties was on the rise in south Johor.

Apart from the Iskandar factor, Tan said Singapore also played an important part in determining the economic growth in Johor.

“It is a well-known fact that both Johor and Singapore are intertwined in economic activities during good or bad times due to their close proximity,’’ he said.

Tan said thousands of Johoreans and locals from other states who stayed in Johor Baru crossed over to the republic daily to work because of the strong Singapore dollar.

He said Johor had been supplying workforce to Singapore for many years and when the two integrated resorts take shape in the next two years, more workers would be needed in the services industry there.

Meanwhile, thousands of Singaporeans visit Johor Baru regularly to shop, dine or visit friends and relatives. Some also owned houses in Johor.

He said although Singapore had slipped into a recession, the S$35bil economic stimulus package would assist the republic, and it could be the first to be out of the downturn.

Real Estate and Housing Developers Association (Rehda) Johor branch chairman Lee Kim Chia also agreed with Tan that Iskandar was the driving factor for the property market in Johor to overcome the downturn.

He said the influx of local and foreign investors would create job opportunities within Iskandar and the presence of new residents would bode well for the property market in south Johor.

“As we can see now, several projects by the public and private sectors are already taking shape in Iskandar and these will create an economic spillover effect,’’ said Lee.

Under the Ninth Malaysia Plan, the Federal Government has allocated RM6.83bil for infrastructure projects in Iskandar.

In the past six months, the Iskandar Regional Development Authority has awarded RM1.62bil tenders comprising 18 projects.

The projects include seven road packages worth RM1.45bil, seven drainage projects worth RM76.52mil and four river-cleaning jobs worth RM89.6mil.

“Everybody knows 2009 will be a tough year because of the uncertainties in the global economy and even the property market is not spared,’’ he said.

However, Lee said that even during bad times, there were people who needed houses, thus the need for developers to be innovative and creative in their marketing strategies.

He said some of the developers might proceed with new launches; others might defer or scale down their products or even review the pricing.

Lee said the last quarter of 2008 was already showing signs of slowing down in the property market following the credit crunch in the US and the financial crisis in Europe.

He said developers taking part in the last property expo in Johor in November managed to record RM100mil sales.

“The figure is still considered good and Rehda is hoping to record a similar figure for the coming Mapex 2009 to be held either in March or April,’’ said Lee.

By The Star (by Zazali Musa)

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