Yes, there have been a few glitches, but let’s not be too quick to shoot IM down.
Not all are on board with Iskandar Malaysia’s (IM) vision to be a regional business hub, the excitement has faltered somewhat in recent years as concerns of a property oversupply compounded by a ‘missing’ population continue to linger. Quite a few stakeholders, however, are still optimistic over the viability of the mega-project – after all, good things take time and effort.
As pundits debate on whether or not IM will live up to its vision of “being a strong and sustainable metropolis of international standing by 2025”, Charles Tan shares his perspectives and offers a few suggestions to help bring the best out of the economic region’s potential.
What are your views on the residential property oversupply situation in IM? How can it be remedied?
Oversupply is not all doom and gloom as painted by many experts; it is merely an unrealized opportunity. Instead of wringing hands over the unsold property units, we should focus on the demand bit; provide more solutions on how to increase the demand side of the equation. A greater emphasis must be placed on job creation.
It is as simple as giving the people what they want. Build more affordably- priced homes and not just high-end, luxury condos. You have to build the right kind of housing to draw in talent from other states, especially the Klang Valley. Perhaps change the composition of homes being built, a matter of tweaking the product size and layout could greatly improve housing sales.
Nevertheless, residential property is just part of the IM picture. Let’s not forget the various investments that have materialised and more taking shape – IM is now home to two theme parks, various colleges and international schools, upcoming big-branded malls including Paradigm and Mid Valley as well as the RM5 billion Vantage Bay Healthcare City, which will commence construction in October 2017. At the end of the day, the people working at these places will need homes to live in. Other strategic moves include; to expedite the approval process for manufacturing plants and implement moves to attract businesses to set up shop in IM, especially those from Singapore. IM has the land and space within Singaporean businesses crave. IM is within a convenient distance, making it possible to house their manufacturing plants in Iskandar and head office in their home country.
Similarly, we must build more international schools with the right concept and facilities; there is a huge demand from Singaporean parents for schools providing large, green fields. Singaporean schools do not have the luxury of space, hence it is very important that we get these seemingly small details right.
There are concerns that the sheer scale of Chinese property developments in IM, particularly Country Garden’s Forest City might give rise to ‘ghost cities’, which China is already known for. What are your thoughts on this matter?
The supply of these Chinese homes, Forest City especially has drawn flak– the four islands are estimated to house some 700,000 people upon completion. Nevertheless, let’s not forget that IM won’t be receiving a sudden influx of units in 2018 – these homes are to be built across a 20- year span.
Besides that, it should be noted that there are many residential units being built in IM by local developers too. These aren’t being shouted from the rooftops as these Malaysian developments have not attracted as many purchases from foreign purchasers as their Chinese counterparts. As reported in the media, the Chinese nationals were coming in by the planeloads to snap up Forest City units as many are seeking a ‘summer’ home or have been outpriced out of the housing market in China’s urban areas.
The Chinese mega-developments, including Danga Bay and R&F Princess Cove, are undeniably huge but contrary to what many believe, they do not hold the lion-share of investments coming into IM. When compared with Malaysia’s overall foreign direct investment (FDI) in 2016 totalling US$9.6 billion, Chinese investments constituted less than 10% (US$1.1 billion). Should you drive around IM today, you will observe many property projects there are owned and being built by local developers. There are many new industrial developments, catering to the manufacturing sector as well.
Unequivocally, a development will only succeed if it brings value to the local population and surrounding region. Country Garden is aware of the need to create a balanced and sustainable ecosystem, one which does not only consist of luxury homes. One cannot accuse the developer of not trying to create a multi-faceted metropolis – In a bid to grow the township in different sectors, Country Garden recently signed various groundbreaking memorandums in August 2017.
Some of the 21 MOUs signed were with Chinese co-working space operator Nashwork; China’s prestigious Foshan Hospital of Traditional Chinese Medicine to establish a satellite facility within Forest City and Hong Kong-listed PCCW Global, which offers world- class digital infrastructure. These investments will complement duty-free shopping destinations, an entrepreneurial hub and various sports and recreational facilities.
If executed well, the Forest City mega project will generate a number of positive spillovers. Besides attracting more FDI into the IM region, the many commercial components across the 4 islands will provide job opportunities for the locals. Should Country Garden and the local authority work hand in hand to implement the development plans strategically, they would be successful in generating commerce activity in the green and smart city, making it desirable for the locals
to work and even live there. Local talents might be drawn to work in Forest City instead of Singapore in the future.
On the downside, should the Chinese buyers opt to keep their properties as investments or save them for retirement or for their children, then there is the risk of ghost cities emerging.
“We cannot compare Johor with Kuala Lumpur, as Johor has a population of about 2 million people and it won’t be able to support an MRT or LRT. The BRT and RTS are more cost-effective and suit Johor best. Johor, IM specifically — does not have a large enough population to support such a transportation system.”
DATUK ISMAIL IBRAHIM
Iskandar Regional Development Authority (IRDA) Chief Executive
What do you think of the above statement? Will the Bus Rapid Transit (BRT) be sufficient to support IM’s growth?
The BRT system is a healthy start; it will cover 90% of the total area of IM upon completion and will be developed in 3 phases or lines; JB – Skudai, JB – Johor Jaya and JB – Iskandar Puteri. The BRT will be also be integrated with the Rapid Transit System (RTS), where the Bukit Chagar interchange station in central JB will connect directly to Singapore’s Woodland MRT station.
These investments will greatly improve linkages between JB and Singapore, but it is still a distant future away – the RTS’s scheduled completion is in 2022, that is 5 years away. Meanwhile, the first phase of the BRT will only be up and running in 2020!
As the BRT uses primarily existing roadways and there is no need to construct supporting rail lines, this project should be fast-tracked and commence operations as soon as possible. Public transportation infrastructure is extremely powerful in facilitating an area’s growth – it is the catalyst to draw in the population. Why wait for the population to catch up?
Stakeholders should take an active role in pressuring the authorities to be more proactive in driving the speedy development of local public transportation
and the right links to CBDs and places of interest, only then will IM realise its work, live and play vision. Proper planning and speedy implementation of the RTS is crucial too. This rail network is key to driving IM’s growth as a business hub. Let’s face it, IM has one thing that Singapore lacks – land. IM is the answer to Singaporean businesses, MNCs and growing SMEs who are in need of production/ manufacturing hubs.
Moreover, it will only cost a fraction of the price to set up shop in IM. It is close enough for companies to have their manufacturing base there and their head office (finance, R&D and HR) in Singapore. The RTS will be a game changer, it will provide working professionals in Singapore to enjoy a cheaper and better quality of life by living in Johor, where the type of property is concerned.
"Public transportation infrastructure is extremely powerful in facilitating an area’s growth – it is the catalyst to draw in the population. Why wait for the population to catch up?" -CHARLES TAN
Why must we work the other way around instead to draw in population and how can it be done?
IRDA has established a few focus industries in order to accelerate the market and enable job and business creation, which in turn would drive property demand. These include tourism & leisure, education, healthcare & wellness and creative sectors. Efforts can be seen through the materialisation of the Legoland and Hello Kitty theme parks, which draws in weekend tourists from other states and Singapore; various world-class educational institutions ranging from primary to tertiary levels and healthcare facilities such as Gleneagles Medini Hospital and Columbia Asia Hospital, both providing 300 and 80 beds, respectively.
The promise of potential from all these investments has contributed to the development of mostly high-end residential units in the past few years. To reiterate, a more affordable mix of homes has to be introduced. Working on the area’s livability and built environment should be a top priority too – Regardless of fancy buildings and a strategic location, when there are no supporting infrastructure, commercial elements and transportation services in a green field development, people will not want to live there.
Ask these questions - What are citizens requirements and what will they look for in a neighbourhood? Top answers will be commercial vendors and food outlets (including mamak shops), service outlets such as launderettes as well as efficient transportation services. People want to stay in an inclusive neighbourhood – the surefire way to foster clusters of thriving neighbourhoods is through proper development of public goods and services.
It can’t be denied that IM has put Johor on the world map; prior to the mega project, most Malaysians perceive Johor to be a ‘pretty dull’ place. IM has great potential to transform Johor’s economic and living landscape – which is why even His Majesty Sultan Ibrahim is taking an active interest in IM’s development.
Ultimately, a realignment of focus to draw in the population is needed. There is no magic bullet - it is going to take a series of strategic moves, as highlighted above for the people to warm up to IM.