Iskandar M'sia Eyeing S'pore Outfits

Source : The Business Times, May 21, 2009

Its developers plan to make pitch at Cityscape Asia exhibition here

SINGAPOREAN companies have yet to make big property investments in Malaysia's Iskandar region, but the developers in charge of planning the area are hoping that this will change soon.

Horizon Hills: Foreigners make up 55 per cent of buyers in this project and some 90 per cent of the foreign buyers come from Singapore

Malaysian developers UEM Land and Iskandar Investment Berhad are both participating in this year's Cityscape Asia exhibition and conference in Singapore, and are aiming to attract more property investments into Iskandar Malaysia, which is located in southern Malaysia.

UEM Land, the master developer of Nusajaya, a key development project within the Iskandar Malaysia, has seen many buyers from Singapore pick up units in its residential projects in the Iskandar region.

Wan Abdullah Wan Ibrahim, managing director of UEM Land, says that for the company's East Ledang and Horizon Hills projects within Iskandar, foreigners make up 65 per cent and 55 per cent of buyers respectively. And some 90 per cent of all foreign buyers come from Singapore.

The company plans to start selling homes in Puteri Harbour - an upmarket waterfront and marina area within Iskandar - this year, and is hopeful that take-up will be strong.

However, when it comes to Singaporean developers' willingness to invest in Iskandar, the response has not been as keen.

For the land that UEM is in charge of, some RM600 million (S$247 million) of foreign investment has been secured, says Mr Wan Abdullah. However, none of it was from Singaporean companies. Companies from the Middle East have been most keen in investing in Iskandar.

By contrast, interest in Iskandar's Southern Logistics & Industrial Clusters (SiLC) - an advanced technology community - has been stronger. Singapore-based investors make up 40 per cent of investors at SiLC, and include companies such as Jurong Technologies Industrial Corp and Yongnam Holdings.

UEM is now hoping to partner Singaporean developers to build homes and develop retail and hospitality properties within Iskandar.

Iskandar Investment Berhad, which is in charge of other parts of Iskandar, also hopes to attract more investors from Singapore.

'For Singapore investors, we believe that Iskandar Malaysia plays a complementary role,' said Arlida Ariff, chief executive. 'It will enable and provide them with the facilities to build and expand their organisations further.'

The response from Singaporean investors has been favourable, she said, and added that discussions are ongoing.

Iskandar Malaysia has nearly met its overall foreign direct investment target of US$13 billion for the phase ending in 2010. To date, Iskandar Malaysia has altogether drawn more than US$11 billion, or 92 per cent of its targeted investment amount.

Najib To Pitch For Iskandar

Source : The Straits Times, May 21, 2009

JOHOR BARU: Malaysian Prime Minister Najib Razak will make a pitch for the Iskandar project as a promising venture for Singaporeans to invest in when he meets Prime Minister Lee Hsien Loong on Friday.

Malaysian Prime Minister Najib Razak (left) will make a pitch for the Iskandar project as a promising venture for Singaporeans. --PHOTO: ST

Having said that he will place cooperation in Iskandar high on his agenda, Datuk Seri Najib visited the economic corridor in Johor on Thursday, just before he travelled overland into Singapore for his introductory visit.

In the morning, he did an aerial survey of the 2,200 sq km project by helicopter. Then, he launched an environmentally-friendly 'district cooling plant', which uses a centralised air-conditioning network system to cool all the buildings in Kota Iskandar - the new administrative centre of the Johor government.

Speaking to reporters after that, he pointed out that Iskandar not only creates economic opportunities, but also reaps social benefits by maintaining a 'sustainable and balanced' environment for the next generation.

He added that his message in Singapore would be that Iskandar 'is a very promising and exciting development for Singapore to consider'.

And that assessment applies 'whether at the strategic level, for their participation at the equity and development level, or for individual Singaporeans to consider, like purchasing houses and properties,' he said.

Launched in November 2006 by former Malaysian premier Abdullah Badawi, Iskandar is Malaysia's main southern development corridor.

Mr Najib said the Malaysian government would continue to support the development of Iskandar, which has attracted RM42.6 billion in investments so far.

He also does not expect foreign direct investment to Iskandar to suffer, despite the global economic downturn.

The Pivotal Jewel In The Crown

Source : TODAY, Thursday, August 7, 2008

Even as much work remains, its ‘catalyst developments’ are nearing completion

TOUTED as the key driver of Malaysia’s Iskandar project, Nusajaya — a 23-minute-drive from Senai International Airport and 15 minutes from Singapore’s Jurong Port — is the pivotal jewel in the crown that foreign investors would be closely watching.

Which is why no amount of political drama will derail its development into a 24,000-acre regional city, assured Mr Zamry Ibrahim, general manager of strategic marketing for Nusajaya’s master developer UEM Land.

















Said Mr Zamry: “The government, irrespective of the political leadership, will always be supportive of economic activities that will generate value and economic growth of the country and attract foreign investments.”

Since its launch in February last year by Malaysian Prime Minister Abdullah Ahmad Badawi, sceptics have wondered whether Malaysia’s latest national project will be just a pipedream, especially at a time when Mr Abdullah’s political star has been on the wane amid political turmoil.

Yet Nusajaya’s progress so far provides the perfect riposte: Even as much work remains, its “catalyst developments” are nearing completion. By the end of the year, high-rollers on swanky yachts can sail into the Public Marina’s 75 berths and enjoy the harbourfront view at the Puteri Harbour Clubhouse and Promenade. By then, a clubhouse and 18-hole golf course exclusive will also be ready for residents of Horizon Hills, a high-end private residential village.

While Singapore’s big-name developers have yet to come onboard, Mr Zamry pointed to the heavyweights from the Middle East: The Mubadala consortium from the Gulf Cooperation Council countries, and Limitless LLC and DAMAC Properties of Dubai.

The Middle Eastern influence — and its “the grander the better” mantra — isapparent. Just check out the lavish230-acre, RM400 million ($167 million) Johor State New Administrative Centre.

Pointing out how Nusajaya’s land value continues to appreciate, Mr Zamry told Today: “Other foreign investors recognise the value and potential of Nusajaya and have invested ... the early investor would obviously see more upside potential.”

And worries over how the crime rates in Johor could put off buyers of residential properties appear to be overblown, at least going by the official take-up rate, with Singaporean buyers snapping up the upmarket villas and bungalows.

The average price for the semi-detached houses and bungalows has been between RM180 and RM230 per square foot.

Of some 2,000 units launched for sale so far, around 80 per cent have been taken up, of which more than half were sold to foreigners. Around 80 per cent of the foreign buyers are either Singaporeans, working in Singapore or Malaysians married to Singaporeans.

Further inland, about 10 per cent of Nusajaya’s 1,300-acre industrial park, the Southern Industrial and Logistics Clusters, SiLC, has been sold for around RM114.6 million in total.

Among the Singaporean firms investing there so far are advanced technology firms such as Yong Nam Holdings, HG Metal Manufacturing and Jurong Technologies.

Mr Zamry stressed that Nusajaya — which he described as a “new area of regional growth adjacent to Singapore” — will complement the Republic’s economic activities. Still, with developments including a mega tourist resort and an educity that will house the world’s leading universities — which are driven separately by Khazanah Nasional Bhd, the investment arm of the Malaysian government — a fully up-and-running Nusajaya will certainly give Singapore a run for its money.

And one wouldn’t bet his last dollar against it, going by the quiet determination — particularly discernable from the private sector — driving the project thus far.

“The rapid pace of development at Nusajaya would speak for itself and eventually build the confidence of sceptics,” said Mr Zamry.

PM Lee Positive About Proposal To Link Up S'pore, JB Urban Rails

Source : Channel NewsAsia, 17 April 2008

Prime Minister Lee Hsien Loong has responded positively to a suggestion by Johor's Chief Minister Abdul Ghani Othman to link up the urban rails of Singapore and Johor Bahru.

The issue was discussed when visiting Malaysian Foreign Minister Rais Yatim called on Mr Lee at the Istana on Thursday morning, said Foreign Minister George Yeo at a joint news conference with his Malaysian counterpart later in the day.

The proposal will now be discussed by a joint ministerial committee which is looking into the Iskandar Malaysia project. This committee was set up after PM Lee and his Malaysian counterpart, Mr Abdullah Badawi, had their first retreat in Langkawi last year.

Related Video - http://tinyurl.com/5gbqcq

Singapore is the first stop in a series of introductory visits by the new Malaysian foreign minister, and this signals the special relationship between the two neighbours.

Dr Rais said: "Between Malaysia and Singapore, there is only a one-way street and that is to forge ahead together for a future within ASEAN and to share the good fortunes of what the world will offer.

"No one will come to us and help us except ourselves. Therefore, the commonality between the two nations should be at the top of priority lists and the differences – whatever they are – should be left to be scored later."

Among the issues discussed between the Singapore and Malaysian foreign ministers is how to further integrate the economies of both countries and to enhance connectivity across the causeway.

The Iskandar Malaysia project is one of the cooperation projects which both foreign ministers hope would enhance bilateral ties between Singapore and Malaysia. The project's joint ministerial committee is already in place to look into various proposals.

Mr Yeo said: "Last year, the two prime ministers had their retreat in Langkawi which was very successful, and we are hoping that Singapore can host the next retreat sometime in the near future."

He added that the International Court of Justice is likely to release its ruling on the disputed island of Pedra Branca next month, and both foreign ministers have agreed that they would congratulate whichever country that emerges victorious.

"Whatever the decision, we would accept it and it will not affect bilateral relations. The lighthouse would continue to provide valuable facilities to all navigators, so nothing should change. This is the common position we take," said Mr Yeo.

Dr Rais said: "What is committed through the rule of law, through international arrangement, we must respect. If we do not do that, then being neighbourly is not substantive enough."

On the current political situation in Malaysia, Dr Rais stressed that the question of leadership change is not on the agenda at all.

He said: "These are what we call political airings or political elements in the thoughts of certain sectors in the party as well as outside the party... more so in the opposition.

"The litmus test would be at the (UMNO) general assembly, which would be held in December, and I am most confident that Datuk Seri Abdullah will be the winning element for us all and the Barisan (Nasional) will continue to be a strong and prospective true government for Malaysia."

Dr Rais is also confident that Malaysia's relationship with Singapore will continue to improve going forward.

On Thursday afternoon, the Malaysian foreign minister also called on Senior Minister Goh Chok Tong at the Istana and had a friendly exchange of views on recent developments in Malaysia and the state of bilateral relations.

The two leaders reaffirmed the importance of having good neighbourly relations between the two countries. - CNA/so

Theme Park Land In Johor Could Be Free

Source : The Business Times, April 17, 2008

Johor exploring possibility of S'pore-Iskandar train link

Iskandar Malaysia, the mega development region in Johor, may yet steal an edge over Singapore, especially if it offers choice development sites for free.

Khazanah Nasional Bhd managing director Azman Mokhtar said that the option to offer land to build an anchor theme park for free is a 'possibility'.

Speaking at the Iskandar Malaysia pavilion at Cityscape Asia 2008 yesterday, Mr Azman said: 'The economics of something like that will be taken in toto. You don't just look at it narrowly. Whether it is a loss leader or zero leader is another matter.'

Mr Azman did, however, say that there are many 'permutations' to how a deal with a potential theme park operator could be drawn and explained that this could see Khazanah 'staple' the theme park site together with other development sites as a condition. '(Free theme park land) is a possibility but it will not be a zero,' he added.

Mr Azman also took the opportunity to say reports that Khazanah was talking to theme park operator Walt Disney were inaccurate as the process of selecting an operator was an ongoing process.

He said: 'We have issued memorandum of information to main branded theme park players except for Universal, and this does not preclude local operators.'

The theme park will sit on more than 890ha of land in Iskandar. Giving an indication of a possible theme to the theme park, Mr Azman said it could be an 'eco or nature-based theme park' with no casino component. He added that 'a handful of players' have shown interest.

While the investment value of the anchor theme park has not been revealed, Mr Azman said that since Iskandar (formerly Iskandar Development Region) was relaunched 18 months ago, it has already attracted RM33 billion (S$14.14 billion) worth of investments, representing 70 per cent of its initial five-year target of RM47 billion.

So it is perhaps safe to say that the investment value of the theme park development together with other possible 'stapled' components is not expected to be more than RM14 billion.

Being able to spend capital otherwise set aside for land cost could potentially make the Iskandar theme park competition to be reckoned with. Mr Azman said as much when he noted that the Universal Studios theme park at Singapore's Resorts World at Sentosa is 'relatively small'.

Singapore is nevertheless one of Johor's top three international investors, and Mr Azman reiterated that the plans for Iskandar should be 'complementary'.

Plans to link Johor with Singapore via a rail network further underscores the possible synergy between the two cities.

Also speaking at the Cityscape Asia event was Johor Chief Minister Abdul Ghani bin Othman who said that the state has been exploring the possibility of connecting a mass transit system in Iskandar with the Singapore MRT network.

Adding that it would be 'mutually beneficial', Mr Abdul Ghani revealed that the next ministerial-level meeting on this is likely to take place next month.

Iskandar is expected to be 2.5 times the size of Singapore when completed and investors from Abu Dhabi, Lebanon, Spain and Singapore have already been roped in, while it is also in discussions with investors from India, China and Indonesia.

Some Singapore-based brands that have ventured there include it is JTIC (Jurong Technologies Industrial Corp).

Malaysia's IDR Attracts Major Middle East, Singapore Investors

Source : Channel NewsAsia, 15 April 2008

Singapore investors have been snapping up the properties within the Iskandar Development Region (IDR) in the Malaysian state of Johor, according to Malaysian property firm UEM Land.

UEM said Singapore investors have so far accounted for 95% of the industrial properties sold on the 24,000-acre plot of land in Nusajaya. The developer said the majority of industrial property interest has come from small and medium businesses.

Singapore investors also make up for 50% of residential sales there.

UEM Land said it is currently in further discussions with Singapore firms for larger joint projects in the IDR, to keep ahead of competition.

"It's not just one man's dream; it's founded on very strong foundations, one of which is Singapore. How do we complement Singapore? At the end of the day, these two governments need to collaborate. Because if we don't, India and China will make us irrelevant in the future, so we've got to collaborate," said Wan Abdullah Wan Ibrahim, MD of UEM Land.

The 24,000-acre plot of land, just a 10-minute drive over the Second Link Bridge from Singapore, Is set to accommodate some 500,000 people when completed in 2025, up from the current 75,000 already there.

Since its launch early last year, 128 acres of industrial land has already been sold and UEM is aiming to sell a further 180 acres this year.

The largest investment to date came from Middle Eastern company Limitless, who is in a joint venture with UEM to pump some S$100 million to develop a 111-acre plot of land.

The developer is looking to spread its wings and gain further investment from overseas, but has noted some concerns.

"We notice that the prime concern, especially coming out of Singapore, is safety and security. So we decided that we need to address the concern," said UEM Land's MD.

To address the issue of security, UEM will be collaborating with General Electric to create a security masterplan. - CNA /ls

Malaysia's UEM Land, S'pore Firms In Talks

Source : The Business Times, April 15, 2008

Malaysian state property developer UEM Land is in talks with Singapore real estate firms about joint projects in a US$105 billion industrial and tourism zone in Malaysia's south.

Malaysia unveiled a blueprint in 2006 to transform the southern tip of Johor state into a regional economic zone for industry, logistics, trade and leisure.

'We are in various stages of discussion with Singapore interests,' UEM Land managing director Wan Abdullah Wan Ibrahim told Reuters in an interview on the sidelines of a real estate event in Singapore.

He said that the involvement of Singapore firms - in particular those linked to the government - would boost investor confidence in the Iskandar Malaysia project, just a few minutes drive across the narrow causeway linking the two countries.

Singapore developers that are part-owned by state investors Temasek include CapitaLand and Keppel Land.

UEM Land is the flagship property company of the UEM Group, formerly called United Engineers Malaysia, which is in turn owned by Malaysia's state investment company Khazanah Nasional.

Under a revamp of the group announced earlier this year, UEM will list on the Malaysian stock exchange in September by taking over the listing status of UEM World, which last year reported a 4-fold rise in net profit to RM939 million (US$297 million).

Mr Wan Abdullah said UEM Land aimed to be a regional developer with projects in neighbouring countries by 2010 but its immediate priority was to develop its 9,713-ha Nusajaya development in the Iskandar region.

'There are opportunities today but the board feels we should not divert our attention...but we definitely have the desire to be a global developer.'

Malaysia announced in 2006 plans to set aside 2,200sq-km of land in Johor for a special economic zone that would provide residents and companies in neighbouring Singapore with land for leisure and industry.

Covering an area three times the size of Singapore, Iskandar has attracted Middle Eastern investors including Dubai World as well as multinational companies such as General Electric.

UEM is overseeing the development of a 9,712ha site within the development. -- REUTERS

MPCB To Build Hub For Trade In IDR

Source : The Business Times, April 15, 2008

PROPERTY developer Malaysia Pacific Corporation Berhad (MPCB) is planning a giant retail and wholesale trading hub as part of its flagship development LakeHill Resort City in Johor's Iskandar Development Region (IDR).

IDR is a special economic zone aimed at garnering both domestic and foreign investment.

Bill Ch'ng, CEO of MPCB, told BT last week that its Asia-Pacific Trade & Expo City (Aptec) would be a 'platform for greater regional collaboration, bringing about greater socio-economic benefits'.

He also said that it would create a strategic partnership between Singapore and Malaysia - one that could, among other things, tap the mass consumer market of Asia-Pacific's 800 million population.

At 4 million sq ft, Aptec aims to be the largest trade, expo and wholesale distribution centre in the region. It is projected to create over 50,000 jobs directly as well as an additional 200,000- plus jobs in supporting industries.

Costing RM1.2 billion (S$517 million) to build, Aptec is slated for completion within three years once plans for construction have been given the green light.

Besides housing a wide variety of products from India, China and the Asean countries, it will also boast an entertainment and tourism complex.

Aptec will be part of the 196 hectare LakeHill Resort City, an integrated resort town that will hold about 12,000 residential units, a shopping mall, office suites as well as a heritage and cultural village.

Taking into account the property market here, young Singaporeans may want to look across the Causeway for more affordable properties, suggested Mr Ch'ng, especially with the recent relaxing of certain Malaysian laws such as long-stay visas.

To be developed at a cost of some RM3 billion, LakeHill Resort City is expected to generate an estimated gross development value of RM6.3 billion over 8-10 years.

Singapore Can Help Market IDR: MP

Source : The Business Times, March 18, 2008

The federal and Johor state governments should forge a smart partnership with Singapore and use the Republic's international trade links in marketing the Iskandar Development Region (IDR).

Pulai MP Nur Jazlan Mohamed, whose constituency is located in the IDR, said that as many multinationals were based in the Republic, Singapore's international trade links could also be used to thwart negative reports from foreign media.

'We have to accept the fact that Singapore is more highly regarded by the international community than Malaysia. Its trade links are enormous. What is wrong with Johor using Singapore's international links? If the Singapore government can work with us, it can help promote the IDR and we can together develop the IDR,' he told Bernama in an exclusive interview yesterday.

Mr Nur Jazlan, son of former information minister and former Umno secretary-general Tan Sri Mohamed Rahmat, is the director of several public-listed companies.

According to Mr Nur Jazlan, Singapore is a hub for several foreign companies and the Government of Singapore Investment Corporation (GIC), was active in the international financial market. GIC had recently made several high-profile investments in UBS and Citigroup.

He said that the frequent negative reporting by foreign media sent the wrong message to foreign investors. He cited as an example the foreign media report on the 12th General Election, which focused on racial tensions and the street demonstrations organised by an unregistered group, the Hindu Rights Action Force.

'We have to find ways to reach the international trade community in Singapore to convince foreign investors to invest in the IDR, and to put an end to the foreign media's negative perceptions of Malaysia,' he said.

He said that the IDR would not succeed if the media and foreign investors continued to hold negative perceptions of Malaysia. The IDR, launched by Prime Minister Abdullah Badawi in November 2006, covers an area of 2,200 sq km in Southern Johor.

Recently, Johor Menteri Besar Abdul Ghani Othman, who also chairs the Iskandar Region Development Authority (IRDA) jointly with the PM, said that the IDR had so far received a total of RM22 billion (S$9.5 billion) in investments.

The IDR was on the right track to achieving its investment target of RM47 billion by 2010. Mr Nur Jazlan was also asked about the lukewarm response from Singapore investors in the IDR, compared to the enthusiastic response from Middle East investors.

'Maybe the Singapore investors do not feel welcome,' he said. Maybe society as a whole should be more open-minded to all investments in the IDR and Johor,' he added. - Bernama

Land Price Hits A High At Johor's Iskandar Region

Source : The Business Times, January 03, 2008

LAND prices in the Iskandar Development Region (IDR) continue to spurt, with a transaction done last week at RM50 (S$21.7) per square foot (psf), compared with RM43 psf four months ago and several times the price two years ago.

It was announced last Friday that a consortium between Dubai's Limitless Holdings (60 per cent) and Malaysia's state-owned UEM World (40 per cent) would embark on a high-end, waterfront development on 45ha of land at Nusajaya that it had bought for RM242 million, or RM50 psf.

Nusajaya, almost in the middle of the IDR, is where a new state administrative capital is being constructed.

The IDR - a special economic zone three times the size of Singapore - has been made a development priority by the administration of Prime Minister Abdullah Badawi. Special incentives, including tax holidays, liberal investment rules and the absence of affirmative action policies that favour ethnic Malays, are aimed at drawing in foreign investment.

The Dubai-UEM World transaction is the third sizeable land purchase in the IDR in as many months.

Recent land purchases totalling RM5.8 billion epitomise a mindset shift by the policy-makers in Kulala Lumpur, who are trying to attract new foreign investment by opening up Malaysia's property markets in selected areas like the IDR.

So far, the new investors have all been well-heeled Middle Easterners with a development track record in other countries.

This influx of predominantly Islamic investment into predominantly Muslim Malaysia has obviated criticism from ethnic Malays disgruntled by Mr Abdullah's suspension of affirmative action policies in the IDR.

The continuing inflow of foreign investment into the area could also jump-start the relatively slow-moving project as it will not only diminish execution risk but, in the nature of a virtuous cycle, also attract other investors beguiled by rising land prices.

The authorities certainly seem to think so. Last week, New Straits Times quoted Johor Chief Minister Ghani Othman as saying at least RM7 billion of projects in the IDR will begin by April this year. They include highways, river clean-ups, residential and office complexes and leisure facilities.

Analysts are excited by the effect of rising land prices in Johor on the share prices of companies with large land banks there. The biggest beneficiary is reckoned to be UEM World, a listed entity that still owns 4,137ha at Nusajaya.

'Its current share price (around RM3.90) imputes an average valuation (of its land bank) of RM12.50 a square foot despite the fact that bungalow and industrial lots are already transacting above RM20 a square foot,' a recent UOB KayHian report estimated. 'At RM50 a square foot, UEM World's real net asset value would jump to RM12.46 a share.'

Joint Ministerial Committee Of IDR Has Second Meeting

Source : Channel NewsAsia, 05 November 2007

The joint ministerial committee for the Iskandar Development Region (IDR) held its second working meeting in Johor Bahru on Monday.

A joint statement from both sides said the committee was taken on a site visit of the IDR, and the members also reviewed the progress made by the four joint work groups so far.

The joint work groups, which cover immigration, transportation, tourism and environment, have identified a number of areas for cooperation. Further discussions will be carried out in the next few months.

The ministerial committee is jointly chaired by Malaysia's Minister in the Prime Minister's Department Mohd Effendi Norwawi and Singapore's National Development Minister Mah Bow Tan. - CNA/ac

Iskandar Now Has More To Offer

Source : TODAY, Thursday, October 11, 2007

PUTRAJAYA — A detailed package of incentives has been offered to a wider range of investors in the Iskandar Development Region’s (IDR) first integrated city development, known as Node 1.


















Zone A - JB City Centre
Zone B - Nusajaya
Zone C - Western Gate Development
Zone D - Eastern Gate Development
Zone E - Senai - Skudai

Map Soure : http://www.idr.com.my

The follow-up to earlier incentives announced on March 22 has been extended to approved developers and development managers.

They were originally intended for Iskandar-status companies.

The Iskandar Regional Development Authority (IRDA) yesterday announced the latest incentive and support package — introduced to kickstart early investment into the region. It includes tax exemptions on income from the sale of land and rental, as well as exemptions on withholding taxes.

Dispelling recent reports that the IDR was only keen on attracting foreign investment, Malaysian Prime Minister Abdullah Ahmad Badawi told reporters after a briefing yesterday: “It is not true that we are not keen on local investors. The corridor is not only for foreign investors. We hope they (local investors) will participate in the development plan of the IDR.”

Mr Abdullah said local investors would also enjoy incentives like the 10-year income tax exemption for certain qualifying activities, if they met the set criteria.

“We are also willing to customise incentives packages for the investors and allow them free access to human capital,” he added.

Mr Abdullah said a total of RM40 billion ($17.3 billion) is needed over the next five years to fully develop the IDR. To date, the region has attracted RM4.1 billion worth of investments. The plans for Node 1 are going well and by early next year some projects could be implemented, he said. — AGENCIES


INVESTOR INCENTIVES
Under the fiscal and non-fiscal incentives, approved developers will enjoy:

• Income tax exemption up to 2015 on income from disposal of any right in or over land within the approved node;
• Income tax exemption up to 2020 on income from rental or sale of buildings within the node; and
• Tax exemption on payments made to non-residents for services, interest and royalties up to Dec 31, 2015.

KL Extends IDR Incentives To Developers

Source : The Business Times, October 10, 2007

PM says 'customised incentive packages' for bigger investors with specific needs can be considered

THE first section of Malaysia's planned Iskandar Development Region, across the straits from Singapore, was yesterday identified for special incentives for approved companies.

Mr Abdullah: Package of incentives includes 10-year income tax exemptions for certain qualifying activities

It is called Node 1 and covers 96 million sq ft - 8.9 sq km - of greenfield waterfront land between the Johor state new administrative centre and the second crossing to Singapore.

The IDR-status companies for Node 1 must operate in six specific service sectors, as announced in March: creative industries, education, financial advisory & consulting, healthcare, logistics, and tourism.

The first package of incentives, which includes 10-year income tax exemptions for certain qualifying activities, will be extended to approved developers and approved development companies as well as IDR-status companies.

Approved developers are those acquiring sub-lease rights to lands within Node 1, while approved development managers are those sanctioned by the developers. In effect, these would be companies which acquire some interest in the building or management of components within the node.

The first node which has already attracted some Middle Eastern investment, is envisaged as a comprehensive development including leisure, residential, financial and high-end industrial components.

Yesterday, Prime Minister Abdullah Ahmad Badawi indicated that the government was also prepared to consider 'customised incentive packages' for bigger investors with specific needs.

Mr Abdullah told a press conference in Putrajaya after he co-chaired the third Iskandar Regional Development Authority board meeting: 'If it is important to do that, we certainly can (consider). The point is we can have discussions with them to decide.'

Malaysia is actively promoting the IDR - which is intended eventually to cover an area about three times the size of Singapore - as a new economic zone for the country and surrounding region.

Some RM4.3 billion (S$1.8 billion) would be injected by the government into infrastructure development for Node 1, and with an estimated RM40 billion required in the first five years alone, huge levels of private investment are needed to drive the plan.

In August, the IDR received its first major boost when four Middle Eastern groups - Aldar Properties, Mudabala Development Company, Kuwait Finance House and Millennium Development International Company - committed about RM4.1 billion to develop the whole area of Node 1 into various themed zones that would include lifestyle, cultural and financial districts.

Tax Perks For Developers In IDR

Source : The Straits Times, Oct 10, 2007

Investors in special zone also exempted from bumiputera ownership quotas

PUTRAJAYA - HOPING to woo bigger investors after some major successes, Malaysia yesterday announced that developers investing in south Johor's economic zone will be given incentives that include a 10-year tax holiday.

Prime Minister Abdullah Badawi announced that existing incentives will be extended to developers, companies undertaking management and marketing for the developers, and expatriates in the Iskandar Development Region (IDR).

The incentives include tax exemptions on income from the sale of land and rental and sale of buildings, as well as exemption on withholding taxes.

They are also exempted from bumiputera quotas in corporate equity ownership and property sales, and are free to source for capital globally and to employ foreign workers.

'Since private investments will be the main catalyst of growth, there is a need to offer investors attractive fiscal and non-fiscal incentives,' Datuk Seri Abdullah said after chairing a meeting of the Iskandar Development Region Authority yesterday.

The incentives were initially confined to companies involved in the creative, education, finance, health, logistics and tourism sectors.

Officials said only developers investing in an area called Node 1 located within Nusajaya will qualify for the perks. The area is about 30km west of Johor Baru and just after the Second Link at Tuas.

Node 1 is about 9 million sq m in size, and is a development comprising leisure, residential, financial and high-end industrial components.

A group of Middle Eastern investors recently signed deals to commit US$1.2 billion (S$1.8 billion) to the area.

Together, the deals make up the single biggest foreign real estate investment in Malaysia.

Recently, Dubai World and Malaysian group MMC also proposed to build a US$4.7 billion maritime park in the IDR.

Asked about fears that local investors were being left out, Datuk Seri Abdullah said the government wanted Malaysians to participate as well.

'This corridor is (also) for local investors. They should also participate. We also accept proposals from local investors,' he said.

The IDR aims to leverage on its proximity to Singapore. It has an area 21/2 times the size of the Republic and Malaysia has it targeted as its next fast-growth area by attracting foreign investors.

Officials said only developers investing in an area called Node 1 located within Nusajaya will qualify for the perks. The area is about 30km west of Johor Baru and just after the Second Link at Tuas.

Node 1 is about 9 million sq m in size, and is a development comprising leisure, residential, financial and high-end industrial components.

A group of Middle Eastern investors recently signed deals to commit US$1.2 billion (S$1.8 billion) to the area.

Together, the deals make up the single biggest foreign real estate investment in Malaysia.

Recently, Dubai World and Malaysian group MMC also proposed to build a US$4.7 billion maritime park in the IDR.

Asked about fears that local investors were being left out, Datuk Seri Abdullah said the government wanted Malaysians to participate as well.

'This corridor is (also) for local investors. They should also participate. We also accept proposals from local investors,' he said.

The IDR aims to leverage on its proximity to Singapore. It has an area 21/2 times the size of the Republic and Malaysia has it targeted as its next fast-growth area by attracting foreign investors.


Beware of S'pore takeover: PAS

A LEADER of fundamentalist Islamic party PAS said Malaysia's 'black history' may be repeated if the government does not prevent Singapore from gaining control of the Iskandar Development Region (IDR).
Mr Salahuddin Ayub, youth chief of Parti Islam SeMalaysia (PAS), was referring to the 'handover' of Singapore by former premier Tunku Abdul Rahman to Mr Lee Kuan Yew.

'The Abdullah government may similarly hand over the IDR to Singapore, when Singapore's political power in the IDR becomes so strong that the easiest way out would be for the Malaysian government to release the region to Singapore,' he was quoted as saying in the Oct 16 issue of PAS' party newspaper, Harakah.

Mr Salahuddin was echoing the fear among some Umno and Malay leaders, including former premier Mahathir Mohamad, that attracting Singaporean investments to the IDR could lead to the Malays losing control of southern Johor.

'If this happens, it would be a black spot in our history when yet another Malaysian territory falls into the hands of a foreign power,' Mr Salahuddin said at a political talk in a village in the Johor town of Pontian.

He said the zealous pursuit of development by Malaysian leaders without regard for adverse consequences would result in losing yet another Malaysian territory.

'If this happens, it would be because the leaders running this country are weak,' he said.

Mr Salahuddin, who is also a Kelantan Member of Parliament, urged Malaysians to think through the issue deeply.

'The people must act before it's too late,' he said.

Arab Money Flows Into IDR

Source : TODAY, Thursday , August 30, 2007

Infusion of funds give the Johor project a boost

PUTRAJAYA — Malaysia’s close ties with the Arab world have produced their biggest dividend yet with the signing of a US$1.2-billion ($1.8 billion) deal to develop art of the Iskandar Development Region (IDR) in southern Johor.

Firms from Gulf Cooperation Council countries will initially invest the money in land and infrastructure development, in a deal signed with Malaysia’s South Johor Investment Corporation (SJIC).

SJIC chairman Azman Mokhtar hailed the agreement as a milestone for the IDR, which aims to turn southern Johor into a new Asian metropolis.

“This is a historic and strategic landmark transaction between our two regions,” Mr Azman said at the signing ceremony yesterday. “By far, this is the biggest single foreign investment ever made in Malaysia.”

The investors are led by Mubadala Development Company, the investment arm of Abu Dhabi, which committed US$520 million. The rest of the money is coming from Al-Nibras 2 Ltd, a subsidiary of Kuwait Finance House, and Abu Dhabi’s Millennium Development International Company. The project will be managed by Abu Dhabi-based developer, Aldar Properties PJSC.

“This will be a flagship development for the region, not just for Malaysia,” said Mubadala chief executive Khaldoon Khalifa Al Mubarak.

The Malaysian government hopes to attract RM50 billion ($21.7 million) to the IDR over five years.

However, some analysts said the ambitious plans to develop not only the IDR, but also the Northern Corridor Economic Region, have been clouded by problems involving the new trade zone at Port Klang outside Kuala Lumpur.

The trouble started when the Dubai partner — which had been granted a 15-year concession to manage and operate a new trade zone at Port Klang — suddenly pulled out amid reports of mounting debt problems, reported the Financial Times.

The Jebel Ali Free Trade Zone Authority had complained that state bureaucrats were hindering the zone’s operations, while the Malaysian government claimed that the Dubai group pulled out because officials had denied it permission to become a main shareholder.

It emerged that the state-run Port Klang Authority had amassed debts of RM4.6 illion because of cost overruns. The government said it would bail out Port Klang with a soft loan, to prevent its bankruptcy. Officials have also suggested starting a corruption probe into the project.

Analysts told the Financial Times that Port Klang’s troubles are likely to raise doubts as to whether the Kuala Lumpur can fulfil its promise to build and operate the development regions in Johor and the Northern Corridor, which covers Perlis, Kedah, Penang and northern Perak.

However, Mr Song Seng Wun, regional economist at CIMB-GK Research in Singapore, believes that the Abdullah administration has put so much of its prestige into the two projects that it would seek to avoid the problems it inherited from the Port Klang project, which the previous government started. — AGENCIES

Mid-East Backers Sign On Dotted Line To Launch Mega Johor Project

Source : The Business Times, August 30, 2007

They will have 70% stake with SJIC holding the rest

THREE Middle Eastern firms signed agreements with the South Johor Investment Corporation (SJIC) yesterday to kick-start the development of the Iskandar Development Region (IDR) in what is likely to become the single largest ever foreign real estate investment in Malaysia.

The three firms are Mubadala Development Company, the investment arm of the Abu Dhabi emirate; Kuwait Finance House, and Millennium International Development Co, a Lebanese-owned construction firm based in Saudi Arabia.

Together with the SJIC - which is owned by Khazanah Nasional, the Economic Planning Unit and the Johor state government - the three firms will develop 902 hectares in southern Johor into 'Rim City', a mix of cultural, leisure and financial habitats for an initial US$1.2 billion that just includes the cost of land and to-be-done infrastructure and landscaping. The final price tag, according to a government official, could be anything between US$6 and US$10 billion.

That the Middle Eastern investors will call the shots is implicit in the control they will have in each joint venture - 70 per cent with the SJIC holding the rest. The master developer for the project is also one of their own - listed Abu Dhabi based Alda Properties.

Even so, the actual work is only likely to begin in a year after the SJIC completes the infrastructure and landscaping to the investors' satisfaction and land titles get transferred. Still, the government converted the land, previously freehold, to leasehold land presumably to avoid political controversy.

The project is deeply significant as this is probably the first time that the government is encouraging the establishment of an international city without affirmative action policy restraints and playing by the international rules of the game.

According to several officials, the investors will be permitted to sell their facilities to all comers without restriction nor will they be subject to state government approvals.

The development also illustrates the wealth of the Middle East. Mubadala, for example, is said to have reserves of over US$1 trillion. And for two of the investor companies - Mubadala and Millennium - this is their first investment in South-east Asia.

Indeed, the IDR project signals a sea change in the investment attitudes of Middle Eastern interests which have traditionally opted to place their excess funds in the US and Europe . But after the 9/11 terrorist attacks, more and more have cast their eyes towards South-east Asia, especially Muslim Malaysia.

The project is also likely to raise asset values in the Iskandar Development Region as the deal values the land at around RM42 (S$18) a square foot. Even after lopping off the costs of infrastructure and landscaping, the land would still be values at over RM30 which is remarkable - a year ago raw land there was going for around RM8 a square foot.

The IDR project is also expected to radically change the way of doing business in Malaysia especially in big project developments. Because the Middle Eastern investors will have control of the project, all contracts are likely to be based on open and international tenders to ensure best prices and quality. So politically connected companies hoping to ride on the boom through negotiated awards are likely to be disappointed.

Moreover, the presence of the Middle Eastern investors is a shrewd political move as it is likely to quell criticism about Malaysia selling out to foreigners especially Singaporean interests. The officials said that there was little to carp about when the foreign investors were all 'our Muslim brothers'.

Finally, the announcement of the project is likely to renew foreign interest in the IDR which has been criticised as 'all talk and no action' .

Iskandar Development Region-US$1.4b Investment Set To Kickstart Project

Source : The Business Times, August 27, 2007

Mid-East investors, Khazanah in special purpose vehicle

A SPECIAL purpose vehicle comprising majority Middle Eastern interests and Malaysian state investment agency Khazanah Nasional is poised to jump-start the Iskandar Development Region (IDR) with an initial US$1.4 billion development of a nucleus 'Rim City' in events that could be announced as early as Wednesday.

While government officials have been tight-lipped about the project, they concurred that Prime Minister Abdullah Ahmad Badawi will be making a visit to Johor on Wednesday to make a 'major announcement'.

The project - done through a masterplan on a greenfield basis - is apparently very ambitious in scale, with one official telling BT that 'this will make the KLCC (Kuala Lumpur City Centre) look like peanuts'.

According to some estimates, the project could be anything between US$4.5 billion and US$6 billion over a period of 10 to 15 years.

The identities of the investors have been kept under wraps although they are said to include Dubai-based Jumeirah Capital and three other parties from Saudi Arabia, Abu Dhabi and Kuwait.

According to the officials, Khazanah will bring land as its portion of its equity in the special purpose vehicle. The rest of the equity will be held by the Middle Eastern investors who will end up with majority control of the company.

The land will be on a 99-year lease, which means it will ultimately revert to government hands, a feature presumably aimed at avoiding any political backlash.

'Giving them control will commit them to the project and give them a certain comfort level after all the pledges made on the IDR,' one of the officials said. 'But they are very tough negotiators and up until now, the talks are still going on in Singapore. Things are still fluid.'

The IDR project signals a sea change in the attitudes of Middle Eastern investors who have traditionally opted to place their excess funds in the US and Europe. But after the Sept 11 terrorist attacks in the US, more and more have cast their eyes towards South-east Asia.

Recently, the Middle Eastern investment spree in Malaysia swelled with Saudi Telecom paying US$3 billion for a stake in Maxis Telecommunications. But the latest round of Middle East investments in the IDR will dwarf even that.

The IDR project is also expected to radically change the way of doing business in Malaysia, especially for big projects. Given that the Middle Eastern investors will have control of the project, all contracts are likely to be based on open and international tenders to ensure best prices and quality. In that sense, politically-connected companies hoping to ride on the boom through negotiated awards are likely to be disappointed.

Moreover, the presence of the Middle Eastern investors is a shrewd political move as it is likely to quell criticisms about Malaysia selling 'its sovereignty' to foreigners, especially Singaporean interests. The officials said that there would be less to carp about when the foreign investors are Islamic interests.

Finally, the announcement of the project is likely to renew foreign interest in the IDR, which has been criticised as 'all talk and no action'. Indeed, the officials said that a series of announcements was likely in the coming months with many investors already lined up. 'But this will provide the spark,' they said.

M-East Investors Set To Pump $1.5b Into IDR

Source : The Straits Times, Aug 27, 2007

Agreement on first large foreign deal in Johor region may be reached this week

KUALA LUMPUR - A GROUP of Middle Eastern investors, including Saudi Arabia's diversified Hariri Group, is set to plough an initial investment of over US$1 billion (S$1.53 billion) into the Iskandar Development Region (IDR) in Johor.

The deal would be the first large foreign investment into the IDR and could provide a boost for Prime Minister Abdullah Ahmad Badawi's pet economic project, analysts say.

Government officials say talks between the foreign investors and state investment arm Khazanah Nasional are in the final stages. An agreement could be reached as early as this week.

Officials say the other investors were groups from Abu Dhabi and Dubai which have established themselves as builders of new cities. The total amount of Middle East investments could be as much as US$6 billion in coming years, they say.

The IDR is a 2,217 sq km area in southern Johor that Malaysia has targeted as its next fast-growth area by attracting foreign investors, including those from Singapore.

Financial executives close to ongoing negotiations say the development will be a joint venture between Khazanah and the Middle Eastern groups.

The foreign investors will own a more than 50 per cent stake in the planned project, which will include a financial centre, a medical city and an entertainment enclave.

Khazanah's equity in the project will be in the form of the land that it will provide.

The size of the land and its valuation have yet to be ironed out, the executives say.

'This will mark a huge turning point for Iskandar because this is the economic component for the infrastructure that will be pumped into the project,' said Mr Manu Bhaskaran, regional director of the Washington-based Centennial Group, a strategic advisory firm.

The IDR is the cornerstone of Datuk Seri Abdullah's national economic agenda and represents a major shift away from the infrastructure and heavy industries strategy pursued by his predecessor Tun Dr Mahathir Mohamad.

A key feature of PM Abdullah's economic plan is the creation of so-called economic clusters to spread growth throughout Malaysia.

The IDR is also meant to be a template for developing two other growth centres covering the east coast states, and the north-west states of Peninsular Malaysia.

And unlike past undertakings, such as the Johor's Tanjung Pelepas Port which was built to claw away business from Singapore, government planners say the IDR is aimed at leveraging on Singapore's economy.

The planned investments underscores the growing trend among Middle Eastern investors to look for new destinations to plough their excess oil incomes outside traditional centres such as the United States.

Financial executives involved in the IDR say the project is also drawing interest from Middle Eastern investors because of the competitive nature of companies from that part of the world.

They say the interest from Abu Dhabi and Dubai investors is partly because Singapore has been successful in attracting investments from Qatar, particularly the Al-Thani family.

Analysts also say that Singapore's economic boom which has led to a rise in the cost of doing business in the island state could give the Iskandar region a boost.

'Iskandar could become the natural outlet for businesses in Singapore,' said Centennial's Mr Manu. 'But Malaysia must ensure there is a seamless access between Iskandar and Singapore. That will be the main challenge.'