Johor’s property market is on the brink of significant growth as a wave of exciting developments takes shape. With the introduction of the Rapid Transit System (RTS), the establishment of a special economic zone, and the emergence of data centres among a few; the region is poised to attract further investment. This article explores how these pivotal projects are set to rejuvenate Johor’s economy and present new opportunities for property buyers and investors alike.
Johor’s property market is gaining serious momentum, driven by impressive transaction volumes and a strong pipeline of new developments. Recent data from NAPIC’s H1 2024 Property Market Report reveals that Johor contributed 15.3% of Malaysia’s total residential transactions, with 18,648 units sold. Even more impressive is the RM9.02 billion in transaction value, reflecting a growing appetite for property in the state.
What’s truly noteworthy is Johor’s dominance in new launches. The state captured 23.6% of all new projects nationwide in the first half of 2024, with 5,376 units entering the market—signalling confidence from developers in the state’s future potential. The sales performance of these units stands at 38.3%, showing a healthy demand. Adding to this optimism, Johor’s population has been on a steady rise, growing by an average of 1.6% per year between 2015 and 2022, far outpacing the national rate. This population boom, combined with the state’s strategic location near Singapore, positions Johor as a prime destination for both investors and homebuyers looking for long-term capital appreciation.
RTS to improve MY-SG Linkages
One of the most highly anticipated infrastructure projects reshaping Johor’s property landscape is the Rapid Transit System (RTS), which will connect Bukit Chagar in Johor Bahru to Woodlands North in Singapore upon completion. Spanning a 4-kilometre track—2.3 kilometres in Malaysia and 1.7 kilometres in Singapore—the RTS is set to drastically reduce traffic congestion along the Johor-Singapore Causeway, which has long been a major pain point for local commuters. With an estimated capacity of 10,000 passengers per hour in each direction, the project aims to cut traffic on the Johor Embankment by at least 35%, significantly improving cross-border mobility for the daily influx of motorists.
Currently, the RTS project is 80% completed and on track for full completion by 2026, with testing and installation phases set to begin in 2025. As the project progresses, property prices in Johor Bahru, especially those near the RTS route, are expected to rise in tandem with investor interest. Property buyers are already seeing a gradual increase in price per square foot (PSF) for condominiums and serviced residences with YoY prices appreciating by 4.64% (RM303 PSF) and 10.42% (RM595 PSF), respectively. Historically, infrastructure projects of this scale tend to drive up real estate demand as connectivity improves. This presents a strategic opportunity for savvy investors to tap into Johor Bahru’s growing market before prices climb further as the RTS nears completion.
Johor-Singapore Special Economic Zone (JSSEZ): The next Shenzen?
The Johor-Singapore Special Economic Zone (JS-SEZ) is poised to become a game-changer for the region, often drawing comparisons to China’s transformative Shenzhen SEZ. This ambitious development will cover 3,505 square kilometres across Iskandar Malaysia and Pengerang, involving six key local authorities, including Johor Bahru, Iskandar Puteri, and Pasir Gudang. This strategic location places it at the heart of Johor’s economic corridor, paving the way for the SEZ to become a hub for innovation, investment, and regional cooperation between Malaysia and Singapore.
The SEZ is designed to attract high-value investments across diverse sectors like medicine, pharmaceuticals, aviation, logistics, education, financial services, energy, and the digital economy. As with Shenzhen, SEZ is likely to create a ripple effect, where increased foreign direct investment (FDI), job creation, and improved living standards follow in its wake. Investors should note that during the recent Budget 2025 announcement, Prime Minister Datuk Seri Anwar Ibrahim stated that the government will unveil special incentives for the Johor-Singapore Special Economic Zone (JS-SEZ) by the end of this year.
Sr Samuel Tan, CEO of Olive Tree Property Consultants Sdn Bhd, describes the JS-SEZ as a model based on the principle that “the whole is greater than the sum of its parts.”
He explains, “Singapore’s remarkable economic development over the past 50 years has positioned it as a global leader. However, with limited land and natural resources, the country faces growth constraints without a hinterland. Recognising the need to sustain its economic momentum, Singapore is diversifying into sectors such as agro-tech, green-tech, and alternative food-tech. This shift opens up significant opportunities for Johor through the Johor-Singapore Special Economic Zone (JS-SEZ), allowing Johor to benefit from foreign investment, technology transfers, and job creation. The model capitalises on the strengths of both regions, with Singapore’s expertise in advanced industries complementing Johor’s availability of land and lower costs.
For Singaporean investors, Johor’s proximity and more affordable land make it an attractive investment destination. The ease of managing operations and overseeing projects just across the border enhances Johor’s appeal, especially for sectors like advanced manufacturing and high-tech agriculture. Johor’s fertile land offers potential for high-tech farming, addressing food security concerns for Singapore. Meanwhile, Johor companies can leverage Singapore’s global logistics and financial networks to export products and access funding, with initiatives like the Forest City Special Financial Zone enhancing cross-border synergies”.
Mushrooming Data Centre Hub
Johor is rapidly positioning itself as a vital data centre hub, fueled by a surge of interest from global tech companies seeking alternatives to Singapore, which is experiencing capacity constraints. According to a report by Knight Frank, this trend is supported by favourable conditions from local authorities, including the availability of land and power resources. The Malaysian Federal Government has recognised this potential, approving RM144 billion in data centre investments nationwide, with Johor alone attracting RM90 billion. This influx of capital underscores Johor’s growing significance in the digital infrastructure landscape.
Lee Kun Thye, Director of Knight Frank (Johor Branch) attributes Johor’s data centre expansion to the rising demand for cloud and AI-driven services, positioning the region as Southeast Asia’s fastest-growing market. She explains,” With over 1,600 MW in planned and operational capacity, Johor is on track to rival regional leaders in digital infrastructure. Key factors driving this growth include Johor’s access to affordable land, reliable electricity and water resources, and Malaysia’s politically neutral stance, which appeals to global tech companies from the U.S. and China. Johor’s supportive policies have further encouraged international data centre operators to invest in the region, bolstering its status as a critical player in digital connectivity.”.
Currently, Johor is home to several prominent data centre clusters including the Sedenak Tech Park, developed by Johor Corporation, and Nusajaya Tech Park (NTP). The region boasts eight operational data centres, with ten more in various stages of development, highlighting a booming ecosystem. Companies, especially social media platforms and over-the-top media service providers such as streaming platforms, are eager to establish operations in Johor to tap into this burgeoning data centre network.
Lee adds, “The ripple effects of these data centre projects extend beyond infrastructure. Developments like Sedenak Tech Park attract renowned tech players such as Princeton Digital, Keppel, and Yondr, encouraging a network of downstream manufacturers and service providers to support the region’s data ecosystem. This has created extensive job opportunities and helped to build a skilled workforce in IT and advanced technologies, laying a foundation for long-term economic stability. Additionally, the growth of data centres is driving investments in renewable energy sources, such as solar and sustainable water systems, essential for supporting energy-intensive operations sustainably.”.
Duty-Free Island Status to Inject Life Back into Forest City
The recent designation of Pulau Satu as a duty-free island will breathe new life into Forest City and help counter the negative perceptions it has faced in recent years as an abandoned “ghost town.” According to industry experts, this strategic move is expected to significantly boost tourism and drive property demand, positioning Forest City as an attractive destination for both local and international investors. The influx of visitors, coupled with the duty-free benefits, could also enhance the region’s retail and hospitality sectors, further solidifying its appeal.
Additionally, the introduction of the new Special Financial Zone in Forest City brings a compelling value proposition for businesses, offering incentives such as multiple-entry visas and competitive income tax rates. This benefit not only reduces the cost of doing business compared to Singapore and other parts of Malaysia but also creates diversification in the local economy. With lower operating costs, industries requiring high-skilled labour can flourish, unlocking new job opportunities and an increase in demand for housing down the road.
Elevated Automated Rapid Transit (ART/E-ART) to Ease Congestion
Besides the major RTS project, the Elevated Automated Rapid Transit (ART) system is set to revolutionise public transport in Johor by replacing the previously proposed Light Rail Transit (LRT). This innovative autonomous train-bus hybrid network will operate on roads, featuring carriages equipped with rubber wheels and advanced sensors that allow them to follow a virtual track. Scheduled to be operational in tandem with the RTS Link by January 2027, the ART is designed to alleviate traffic congestion while enhancing overall mobility. With three planned lines—the 14.78 km Iskandar Puteri line, 18.8 km Skudai line and the 14 km Tebrau line, it will significantly improve connectivity across key areas of Johor, making it easier for residents and visitors alike to navigate the southern state.
The introduction of the ART comes at a critical time, as Johor gears up for substantial developments like the Special Economic Zone (SEZ) and the Special Financial Zone (SFZ) in Forest City. A well-functioning transportation network is essential for attracting investment, as reduced congestion and improved accessibility are key factors for businesses evaluating potential locations. Efficient transit options like the ART will foster economic growth and encourage further property development in Johor.
East Coast Expressway Phase 4 (LPT4) Mersing-Kota Tinggi-Johor Bahru
The ongoing planning for Phase 4 of the East Coast Expressway (LPT4), which will stretch 250 kilometres from Gambang, Pahang, to Johor Bahru via Federal Route 3, promises to be another catalyst for Johor. As the final phase of this expansive infrastructure project, LPT4 presents an exciting opportunity for local communities and businesses alike. The highway will not just reduce travel times; but will also boost economic activities along the route, especially in popular tourist destinations like Mersing.
Moreover, as per the Johor State Long-Term Structural Plan (RSJN30), plans are underway to develop Mersing Airport into a hub for tourism flights, further elevating its status as a travel hotspot. This enhancement of both road and air connectivity is likely to attract more visitors, leading to a surge in tourism-related activities and investments in the area. With the East Coast Expressway Phase 4, the economic landscape of southern Malaysia would enjoy an upgrade, unlocking new opportunities for businesses and residents alike.
Johor Bahru’s Digital Transformation
Johor Bahru is primed for a significant digital transformation, driven by Malaysia’s new Industrial Master Plan 2030, which emphasizes digitization as a key pillar for the state’s growth. This tactic aims to position Johor as a thriving digital and innovation hub, creating a robust environment for technology-driven enterprises. A recent partnership between Iskandar Investment Bhd (IIB) and TM-Nxera, a joint venture between Telekom Malaysia and Singtel, marks a significant step forward in this initiative. By investing RM9 billion to develop advanced digital infrastructure in Iskandar Puteri, the collaboration aims to not only enhance connectivity but also establish the area as a hyper-connected, AI-ready digital centre.
This transformation is expected to attract tech companies and boost overall technology-based investment, further bolstering Johor’s economy. This development will then facilitate the upskilling of local talent, equipping the workforce with the essential digital expertise necessary for thriving in an increasingly competitive market. IIB has stated that the digital infrastructure will be developed with a strong emphasis on sustainability, in line with its vision for a net-zero carbon Central Business District (CBD) in Medini. IIB is also optimistic that the collaboration will enhance subsea connectivity between Johor and Singapore, thereby supporting the development of the digital economies in both regions.
Johor as the Next Investment Frontier?
Johor is experiencing a remarkable transformation, shifting from a state once characterized by high property overhang to becoming Malaysia’s next engine of growth. The diverse initiatives undertaken by the state have not only stimulated property demand but also significantly enhanced property values. Notably, Johor emerged as the leading state in the 2023 Malaysian House Price Index (MHPI), reflecting an impressive annual home price growth of 6.2%.
As Johor cements its role as an emerging hub of economic activities, the future looks exceptionally promising. Investors and property buyers stand to benefit from a vibrant real estate market, driven by a mix of residential, commercial, and industrial opportunities. This dynamic environment positions Johor as a prime destination for those looking to capitalise on its ongoing growth and the new wave of investment flowing into the region.