By: Khalil Adis
With the iconic High Speed Rail’s location in Iskandar Puteri expected to be announced by both the Singaporean and Malaysian Prime Ministers in July this year, Gerbang Nusajaya is fast taking shape with a 25-year master plan that will complement Singapore’s very own Jurong Lake District.
Google “Iskandar Malaysia” and you will find that out of ten stories, seven of them will most likely be adverse news reporting on the special economic zone.
A combination of the ongoing 1MDB investigation in Singapore and the oversupply issue have resulted in a perfect storm brewing that had somewhat resulted in the rather lukewarm property market that Iskandar Malaysia is currently experiencing.
This is despite the strengthening of the Singapore dollar versus the Malaysian Ringgit over the last two weeks.
While the market sentiment is admittedly not as robust as before, the numbers do not lie.
The latest figures showed that Iskandar Malaysia still remains the most successful by far out of the five economic corridors in Malaysia.
According to data from Iskandar Regional Development Authority (IRDA), demand from investors remained strong with a recorded total cumulative committed investments of RM202.45 billion from 2006 until March 2016.
Of this total, 51 per cent or RM103.50 billion represent investments that have been realised.
Of the RM202.45 billion, 60 per cent or RM121.44 billion, are by domestic investments.
“Among the promoted sectors, manufacturing recorded the highest cumulative committed investment at RM54.26 billion. This includes investment from the sectors of electrical & electronics, petrochemical & oleo-chemical and food & agro-processing,” said IRDA in a statement.
Meanwhile, the remaining RM81.01 billion or 40 per cent, were contributed by foreign investors.
The top five countries with the highest cumulative committed investments into Iskandar Malaysia from 2006 to March 2016 were from China, Singapore, United States of America, Japan, and Spain.
Strong sales from Melia Residences
Buoyed by the strong investment figures, the master planner for Nusajaya (now renamed as Iskandar Puteri), UEM Sunrise, recently unveiled Melia Residences at its Mall of Medini sales gallery.
Located within the ambitious township development of Gerbang Nusajaya, Melia Residences is the first residential precinct to be introduced at this Grade ‘A’ site which will be home to the iconic High Speed Rail station in Johor.
Its phase one and phase two sales, saw strong take-up rate, beating market expectations with a total of approximately RM206 million in sales.
This had exceeded the developer’s original target sales of RM196 million for 2016.
“The speed of sales of Melia Residences has been phenomenal with a total of 206 phase one and phase two units completely taken up within the first two days of its launch, surpassing our original target of three to six months,” said Raymond Cheah, UEM Sunrise’s chief operating officer, commercial.
With an anomaly recorded between perceived market sentiment and actual sales on the ground, we set the record straight on why we think Gerbang Nusajaya will be the game changer for Iskandar Malaysia.
Fact 1: 25-year master plan from a listed developer
The difference between a good and a bad developer can either make or break a township.
From the start, UEM Sunrise had been tasked as the master planner resulting in the well planned precincts that you see right now in Iskandar Puteri.
From building affordable homes for Johoreans to luxury residences for discerning investors, a lot of funds had been allocated to build the various infrastructure such as the Coastal Highway and street lightings.
In fact, for the first time in the history of Johor, property prices had appreciated — from around RM350 per sq ft to around RM900 in this vicinity.
With Iskandar Puteri now relatively developed, the focus is now on phase two of Flagship B – Gerbang Nusajaya.
Gerbang Nusajaya commands a gross development value (GDV) of RM42 billion and will be developed over a period of 25 years.
In addition, the township will feature a number of catalytic developments such as Nusajaya Tech Park and FASTrack Iskandar, a 300-acre motorsports city, much like how Nusajaya was planned with EduCity, Legoland Theme Park and so on.
Fact 2: Building in a responsible and sustainable manner
A good township developer will plan according to market needs.
As such, UEM Sunrise had set aside the balance 64 per cent of Gerbang Nusajaya’s landbank for future development (currently, uncommitted).
This ensures that the township developer is able to develop Gerbang Nusajaya holistically on a phase-by-phase basis to ensure that all developments are aligned with the performance of the local and external economies.
Most importantly, developing it at a pace where the market is able to absorb its offerings.
DTZ Consulting and Research Malaysia and Singapore concurs on this in its latest report, titled Market Assessment of Gerbang Nusajaya and Iskandar Puteri.
“With the presence of key catalytic developments ranging from tourism and leisure healthcare and wellness, education, creative to business and industrial sectors in place to stimulate job creation and economic activities, Gerbang Nusajaya is poised to generate strong population growth that will drive housing demand,” its report cites.
Fact 3: Oversupply situation is concentrated in Flagship A (Johor Bahru)
There has been keen interest and news reports on the oversupply situation in Iskandar Malaysia.
This was especially prevalent when Chinese developers starting acquiring landbanks and launching massive township developments by the thousands.
While the oversupply issue is of grave concern, this is mainly concentrated in the luxury market segment in Johor Bahru and Danga Bay.
“The concerns of the oversupply situation and demand slowly are actually driven by large scale launches of residential units in Flagship A (Johor Bahru City Centre), especially those by Chinese developers,” said DTZ Consulting and Research Malaysia and Singapore.
The firm opined that these issues are less threatening in Gerbang Nusajaya “due to its location and immediate connectivity to Singapore, served by the Malaysia-Singapore Second Link”.
In addition, not all market segments are facing the oversupply situation.
In fact, supply for the affordable market segment has been lagging behind.
This has resulted in various initiatives by the federal and state governments such as the PR1MA and Rumah Milik Mampu Johor (affordable homes for Johoreans) programmes respectively.
Fact 4: High Speed Rail station is located here
The master plan by UEM Sunrise showed that the proposed iconic High-Speed Rail (HSR) project between Singapore and Malaysia for the Johor stop will have its station located within Gerbang Nusajaya.
With enhanced connectivity, this will make residences in and around the vicinity highly desirable, especially for those who need to commute regularly to Singapore and Kuala Lumpur.
Generally, properties that are located within close proximity to transport hubs can command a 5 to 10 per cent premium in asking price in the resale and rental market.
In early June, according to The Straits Times, Prime Minister Dato Sri Najib Tun Abdul Razak had said that a memorandum of understanding (MOU) to facilitate the High-Speed Rail (HSR) project between Singapore and Malaysia is expected to be signed in July.
“We expect to sign the MOU with Singapore in July. That’s the target,” he said.
At the MOU, the High Speed Rail’s location in Iskandar Puteri is also expected to be announced.
This will no doubt reignite interest in the property market in Iskandar Malaysia.
Fact 5: A dedicated financial district to complement Jurong Lake District
Just like Jurong Lake District which will be home to the High Speed Rail station in Singapore, Gerbang Nusajaya will also have its own dedicated central business district (CBD) supported by residential clusters.
Gerbang Nusajaya’s Central Business District (CBD) has been planned by UEM Sunrise with a vibrant mixed-use developments that is master planned for connectivity.
“It is strategically located adjacent to Singapore and is also ready to capitalise on the potential HSR link between Singapore and Kuala Lumpur,” said UEM Sunrise in a statement.
The developer has planned for various catalytic developments and strategic partnerships with established developers and multinational companies.
They include Nusajaya Techpark and FASTrack Iskandar.
These iconic projects are expected to draw leisure attractions, trades and industries together resulting in a potential catchment population attracted by the various residential and lifestyle offerings.
Fact 6: Gateway to Malaysia
Just like how Jurong Lake District and Woodlands Regional Centre will be the gateway to Singapore, Gerbang Nusajaya will be the gateway to Malaysia.
In fact, the Malay word, “gerbang” means “gateway” in English.
The master plan that we saw recently at the Melia Residences sales gallery was impressive with a dedicated commercial and residential precincts.
The commercial and business districts is expected to bring long-term growth for the area.
“Gerbang Nusajaya is the new catalyst that will spearhead the next wave of growth in Iskandar Malaysia. Its developments will drive the commercial success of Nusajaya from its strategic location between Malaysia and Singapore,” said Brian Koh, executive director, investment/research & consulting at DTZ Nawawi Tie Leung Sdn Bhd.
Fact 7: Three major economic drivers
Taking a drive into Gerbang Nusajaya feels as though you had just stepped into a futuristic sci-fi movie.
There are various catalytic developments currently taking place here.
The first is a 519-acre integrated eco-friendly tech park called Nusajaya Tech Park.
According to UEM Sunrise, 21 units of ready-built factories (RBFs) were completed in February 2016 with the Certificate of Completion and Compliance already obtained while 22 units RBFs in the subsequent phase are currently under construction and are expected to be completed by the end of 2016.
Making further progress to become an integrated industrial hub, Nusajaya Tech Park has inked an agreement with Telekom Malaysia to establish a 7.94-acre Nusajaya Data Centre.
This data centre is expected to be ready by the second half of 2016 and will serve as a neutral-carrier data centre and regional hub for Telekom Malaysia’s ICT services.
An agreement was also signed by InneuoNusa, a joint venture between UEM Land (a wholly-owned subsidiary of UEM Sunrise) and Iskandar Investment for the delivery of smart and connected services in Nusajaya Tech Park.
Additionally, Nusajaya Tech Park has also signed an agreement with Tokyo-based Mitsui & Co to develop build-to-suit warehouses and factories on seven plots of land measuring 26.4 acres
The second is a 300-acre motorsports city FASTrack Iskandar.
UEM Sunrise has revealed that FASTrack Iskandar is close to finalising the details for the commencement of physical construction works.
Last but not least is the iconic High Speed Rail project.
While no details have emerged, the job creation arising from this station in Gerbang Nusajaya is expected to have a positive spillover impact on the overall property market in and around this vicinity.
Fact 8: Singapore is a major investor here
There are two joint-venture projects between Singaporean companies and UEM Sunrise here – Nusajaya Tech Park and FASTrack Iskandar.
Nusajaya Tech Park is a joint venture project between UEM Sunrise and Ascendas Group from Singapore.
Comprising a 519-acre integrated eco-friendly tech park, it is expected to have an estimated GDV of RM3.7 billion.
The groundbreaking ceremony for Nusajaya Tech Park took place on 12 June 2014 and it has already attracted flagship clients such as Telekom Malaysia.
The firm has signed a land purchase agreement to build a data centre facility on 26 March 2015.
FASTrack Iskandar is a joint venture between UEM Sunrise and Singapore-based FASTrack Autosports (Iskandar) Pte Ltd.
The development will spearhead a unique concept of what is believed to be the first integrated automotive hub in Asia, complemented by commercial, retail and lifestyle amenities.
The 300-acre motorsports city will feature world-class racing, driving, biking and karting circuits of international standards, designed by renowned track designer, Hermann Tilke.
Fact 9: Eight spillover industries
Just from the Nusajaya Tech Park project alone, it will give rise to eight spillover industries.
They include electronics, pharmaceuticals, food processing, precision engineering, fast moving consumer goods, logistics and warehousing.
Fact 10: Strong economic fundamentals and job creation helping to boost housing demand
Upon completion, Nusajaya Tech Park is expected to create 22,000 employment opportunities.
For the whole of Gerbang Nusajaya alone, the area is expected to create an estimated 76,000 direct job offerings, 137,000 indirect job offerings together with an estimated 220,000 population.
With the strong take-up rate for Melia Residences, UEM Sunrise has opened up its phase three sales with limited units currently available.
Phase three will comprises 160 terraced houses ranging from a built up area of 2,006 sq ft to 2,349 sq ft.
Prices starts from RM872,888.
This story was last updated on 16 June 2016