Located in Johor, the southern gateway to Peninsular Malaysia, Iskandar Malaysia economic region is just six to eight hours flight radius from Asia's burgeoning growth centres such as Bangalore, Dubai, Hong Kong, Seoul, Shanghai, Taipei and Tokyo, and within reach of a global market of some 800 million people.
Accessible by air, land, rail and sea, it is flanked by three major ports, the Pasir Gudang Port, Port of Tanjung Pelepas and Tanjung Langsat Port. Because of its strategic location, accessibility to leading Asian cities, proximity to some of the world's most rapidly growing and important economies, and a range of attractive fiscal incentives, Iskandar Malaysia is poised to attract an exciting influx of foreign and high-level corporate investments as discerning investors look to benefit from its many advantages and high growth potential.
The special economic zone grew out of a 2005 government requested feasibility study by the Khazanah Nasional which found that the development of such a zone would be economically, socially and developmentally beneficial.
The National SJER Planning Committee (NSPC), hearing Khazanah's findings, put it in charge of developing a sustainable, holistic approach to development in the region. Iskandar Malaysia was singled out as among the high-impact developments of the Ninth Malaysia Plan, put into action by the Prime Minister of Malaysia in March 2006 to cover the period of 2006 to 2010. In November 2006, the Prime Minister, Chief Minister of Johor, Abdul Ghani Othman and Khazanah revealed the Comprehensive Development Plan (CDP).
Under the plan, five "Flagship Zones" in the 221,634.1 hectares (2,216.3 kmｲ) of land covered are identified as developmental focal points. Four of these Flagship Zones are found in the "Special Economic Corridor" (SEC) of Nusajaya-Johor Bahru-Pasir Gudang. The corridor謡hich includes the significant ports of Tanjung Pelepas, Pasir Gudang, and Tanjung Langsatis prioritized for development in the CDP, with particular focus on Nusajaya.
Johur Bahru City Centre is Flagship Zone A, including development of a new financial district, the central business district, the waterfront city of Danga Bay, a mixed development in Tebrau Plentong and the Malaysia/Singapore Causeway.
Flagship Zone B is Nusajaya, with planned development of the new Johor state administrative centre, a medical hub, an "educity", a resort for international tourism and an industrial logistic cluster and Residence Horizon Hills, Bukit Indah.
Flagship Zone C, the Western Gate Development, focuses on the Port of Tanjung Pelepas (PTP), providing a second transportation link for Malaysia/Singapore, a free trade zone, the RAMSAR World Heritage Park and the Tanjung Piai.
Flagship Zone D, the Eastern Gate Development, focuses on the Pasir Gudang Port and industrial zone, Tanjung Langsat Port, the Tanjung Langsat Technology Park and the Kim-Kim regional distribution centre. In the final Flagship Zone, Senai-Skudai, development is focused on the Senai International Airport, hubs for cargo and knowledge, a multimodal centre and the MSC Cyberport city.
Due for completion in 2025, the mega-development project has been in its planning and mobilization stages for the past two years and is now in its Catalytic Development stage.
Much of the kudos for its success goes to Iskandar Investment Berhad (IIB), an investment holding company working in close partnership with the Iskandar Regional Development Authority to drive investment into Iskandar Malaysia.
IIB promotes and coordinates development to support Iskandar Malaysia. As a catalytic player in part of Iskandar Malaysia's infrastructure projects, IIB's primary goal is to seek world-class investors to bring best practice to the development.
As noted by Ms. Arlida Ariff, President & CEO, IIB develops residential, commercial, and mixed projects in Iskandar Malaysia. It also develops waterfront projects, including residences, resorts, entertainment venues, waterfront amenities, shopping centers, hotels, office suites, and multi-modal and mixed-use ferry terminals.
Formerly known as South Joho Investment Corporation Berhad, the company was founded in 2006 and is based in Johor Bahru, Malaysia with additional offices in Kuala Lumpur and Singapore.
“Our vision is to be the catalytic driver of the mega-project and achieve this by investing in selected strategic initiatives as well as through the contribution of land through sale, lease, granting of concessions or development rights.”
She noted that since the end of 2006, IIB has lured over 60 billion ringgit worth of investment from local and foreign investors, exceeding its own target of 47 billion. The region has nearly met its overall foreign direct invest target of $13bn for the phase ending in 2010. To date, collectively amongst all players in Iskandar Malaysia, more than $11bn, or 92%, has been invested.
Iskandar Investment began 2010 by announcing a feasibility study with Raffles Education Corporation Limited ('RafflesEducationCorp') to develop Raffles University Iskandar, a multiinstitutional education campus in EduCity, Iskandar Malaysia. RafflesEducationCorp is the largest private education provider in Asia Pacific.
#Other recent key milestones include:
- Construction of a 21.5-acre Stadium and Sports Complex which began in February will provide first-class sporting facilities for students and the community in Iskandar Malaysia.
- Construction will be completed in September 2011 in time for the opening of the Newcastle University Medical Malaysia (NUMed) campus.
- Agreement to establish Marlborough College Malaysia, the first international venture for the leading British independent, coeducational boarding school catering to the schooling needs of local and international students between the ages of five and 18. The campus is scheduled to open in September 2012
- Collaboration with WCT, a leading Malaysian construction and property development company, to jointly develop and co-own 1Medini, the first residential development in Medini. The condominium will be launched in mid-2010 with its first phase of 300 units ready by 2013
- Additionally, EduCity and Iskandar, the integrated education hub for Iskandar Malaysia, has also recently tied up with a world-class partner, Newcastle University of Medicine from the UK, to build its first branch campus by May 2011. The university has pledged more than $100m over 30 years to the development.
Ms. Ariff noted that IIB is looking for both foreign and local investors to contribute to the success of Iskandar.
As for the plans for this year, she said that the focus will be countries in Southeast Asia Singapore. Indonesia, China and India. Investors from these countries could become our partners in development projects or they could be buyers of our residential and commercial properties, or tenants for the retail project. We are keeping our options open.
We will still look at investors from Europe and the Middle East. Money can come from everywhere. We are a strategic developer and our main role is to drive commercial initiatives within the 2,217 sq km in Iskandar via joint venture or contribution of land. But, whatever investments we bring into Iskandar have to benefit the state and country.
She noted that the prospects are good in education, leisure, tourism and health services, especially education and health, as these are two segments that are least affected during an economic crisis.
“We have EduCity with institutions to cater for education needs from primary up to university level in the fields of medicine, hospitality, engineering and maritime. For leisure and tourism, there are Legoland in Medini and the Indoor Theme Park @ Puteri Harbour opening in 2012.
We hope to bring in new retail brands.”
“Apart from the property development, we are going to set up a unit this year to provide ancillary support services for property management, IT services, educational, tourism and environmental. We don稚 just want to develop a piece of land and hand over the project on completion. We want to ensure our projects are well maintained and managed in years to come, especially in 2012 when Legoland and NUMed @ EduCity are completed and operational.”
Iskandar Malaysia is fully supported by the federal government of Malaysia which will be offering special incentives to investors such as tax breaks, ease of talent recruitment, lifted foreign ownership restrictions and business facilitated though a regulatory authority.
The largest foreign investor so far has been Acerinox, of Spain, which is building a steel plant for 4.18 billion ringgit. Singaporean and Japanese investors have put up 3.03 billion ringgit and 2.98 billion ringgit respectively.
She attributed the increased investments to the infrastructure that have been developed as well as the strengthening economy and fiscal incentives such as a 10-year tax exemption in Medini in Iskandar Malaysia, besides the flexibility to recruit foreign talents.
To encourage early investment, the government is offering a range of incentives, including a 10-year exemption from corporate and withholding taxes and an indefinite suspension of Real Property Gains Tax, a levy on real estate capital gains imposed in January. The suspension alone could save investors between 5 percent to 20 percent of the chargeable gains from disposal of properties which would have been taxed otherwise.