Iskandar Malaysia continue to register positive growth in investment, both local and foreign. As at November 2015, the cumulative investment was at RM187.96 billion compared to RM156.35 billion in October 2014.
Slower absorption rate in the high-rise residential segment amid a cautious property market. Infrastructure projects, namely the High-Speed Rail (HSR) and Rail Transit System (RTS) are expected to spur further economic growth.
The uncertainties caused by the negative external news and the concern of a possible oversupply of residential units in the state has caused the high-rise sector to continue to cool. There has been a significant reduction in the number of new property launches, especially for the high-rise residential sector.
Some of the notable residential launches in the second half of 2015 are as follows: –
Sunway Iskandar has pre-launched 222 units of Emerald Residence in Zone F Medini, Nusajaya. The project comprises linked houses with built-up areas ranging from 1,919 sq ft to 2,439 sq ft, selling from RM888,000 per unit, super-link houses with built-up areas ranging from 2,681 sq ft to 3,166 sq ft, selling from RM1.3 million per unit and semi-detached houses with built-up areas ranging from 3,927 sq ft to 4,290 sq ft, selling from RM2.3 million per unit.
Shama Medini, a buy-to-lease serviced apartments on a 5.03-acre integrated development, UMCity Medini Lakeside in Medini by UMLand, will offer 196 units of fully furnished apartments. Shama Medini will be managed and operated by the Thailand-based hospitality assets management company, ONYX Hospitality Group. The units are available in four layouts ranging from 583 sq ft to 1,192 sq ft with average selling price at RM1,300 per sq ft. UMLand also targets to launch Citadines, a serviced apartments managed by ONYX Hospitality Group within the mixed development UMCity Medini Lakeside, by early 2016.
Ramada Encore Meridin is a two block of buy-to-lease serviced apartments with a total of 622 units within the mixed use development of The Meridin at Medini, Nusajaya. The developer, Mah Sing Group has signed a franchise agreement with Wyndham Hotel Asia Pacific to procure the Ramada Brand System for these serviced apartments and it will be operated by Topotels Sdn Bhd. The hotel suites featuring studio, one and two-bedroom units ranging from 318 sq ft to 885 sq ft are targeted to be operational by 2018.
IJM Land Bhd’s has launched its new township project, Austin Duta. The 250-acre project will be developed in 12 phases. The first phase, offering 183 units of double-storey terraced houses with a dimension of 24ft by 70ft and typical built up of 2,150 sq ft, has achieved a take-up rate of 60%. The selling price starts from RM650,000 per unit.
ARC @ Austin Hills, a high-rise apartment project jointly developed by Andaman Group and Majlis Bandaraya Johor Bahru is located on a 5.11-acre land in Mount Austin. The project features three blocks comprising a total of 1,843 units. The first two blocks have achieved circa 50% sales since its launch on July 31 whilst the third block is scheduled for launch in February 2016. The ARC @ Austin Hills offers two and three-bedroom units with sizes ranging from 650 sq ft to 900 sq ft, priced at RM420 per sq ft on average.
UEM Sunrise has officially launched Phase 1 of Estuari in Puteri Harbour, Nusajaya in early August 2015. Phase 1 of the project consists of 350 units of double-storey super-link houses with built-up areas ranging from 2,708 sq ft to 3,780 sq ft. Prices start from RM1.39 million per unit.
BCB Berhad has officially launched Elysia Park Residences in August 2015. The project, on 7.82 acres of leasehold land in Medini, features a 4.8-acre Mahkota Park. Phase 1, with three blocks, offers 355 units in eight available configurations sized from 516 sq ft to 1,252 sq ft. Prices range from RM480,000 to RM1.1 million.
Eco Tropics sits on a 303.5-hectare site located at Kota Masai, Pasir Gudang. It is being developed by EcoWorld and has an estimated GDV of RM3.4 billion. Phase 1 offers 558 units of double-storey terraced houses with a typical built-up area of about 1,700 sq ft, selling from RM460,000 per unit and 500 units of double-storey cluster houses with build-ups of 2,200 sq ft to 2,700 sq ft, priced from RM620,000.
A joint venture company between Kuok Group, Khazanah Nasional Berhad and PPB Group Berhad has officially launched the Southern Marina Residences located in Puteri Harbour, Nusajaya. The two condominium tower blocks comprise 456 units, offering 1+1, 2+1, 3+1 and penthouse units with built-up areas ranging from 769 sq ft to 3,317 sq ft. Selling prices start from RM880 per sq ft.
As at 2Q2015, the total net lettable area (NLA) of purpose-built office space which includes private buildings and government buildings in Johor Bahru stands at approximately 8.68 million sq ft with an overall average occupancy rate of about 77.6%, a slight increase as compared to the previous quarter.
Private buildings currently account for approximately 70.85% (6.15 million sq ft) of total purpose-built office space in Johor Bahru.
Rentals of prime and non-prime CBD office space remained stable with asking gross rental for prime space ranging from RM2.50 to RM3.50 per sq ft per month while non-prime office space command gross rental of between RM1.80 and RM2.50 per sq ft per month.
These rates are generally inclusive of the provision of shared services comprising centralized air conditioning, security and cleaning services for the common areas.
The incoming supply of purpose-built office building is expected to be from Medini Iskandar Malaysia Sdn Bhd’s development at Medini, Nusajaya. The development of Medini 9, a 21-storey building with circa 380,000 sq ft NLA is expected to be completed by 1Q2018
As at 2Q2015, the total NLA of retail space (includes shopping centres, arcades and stand-alone hypermarkets) in Johor Bahru stands at about 11.74 million sq ft with average occupancy at 79.5%.
Prime retail space continued to perform well with occupancy rates recorded in excess of 80%, commanding gross rentals ranging from RM15 to RM40 per sq ft per month. In August 2015, WCT Holdings Bhd officially launched Paradigm Mall Johor Bahru (previously the abandoned Kemayan City Mall). Located on a 13-acre freehold tract along the Skudai Highway, the six-storey Paradigm Mall with estimated GFA and NFA of 2.7 million sq ft and 1.25 million sq ft respectively, is targeted to open by September 2016.
The mall offers some 600 units of shops and comes with 4,200 car park bays. Secured anchor tenants include SOGO, Village Grocer and GSC cinema.
The mall is part of the integrated development of Paradigm JB which also includes a hotel and a serviced apartment tower.
There were severable notable industrial activities in this half and they include the following: In line with its long-term target of having RM3 billion worth of assets under management, Axis REIT acquired four plots of freehold land measuring 9.76 acres in i-Park, Indahpura for a total consideration of RM61 million.
Each land parcel is improved with a single-storey detached factory, annexed 2-storey office building and other supporting structures. The properties are currently leased to Beyonics Technology for 10 years, expiring on July 31, 2025.
UMLand is partnering Johor Biotechnology and Biodiversity Corp (J-Biotech) to develop a halal biotech park, called Johor Biotech Park, in Felda Cahaya Baru, Pasir Gudang. The park, with estimated GDV of RM1.5 billion, will be developed over the next seven years.
The first phase, featuring 89 units of double-storey factories, shophouses, a dormitory for up to 600 workers and an international Islamic school, is targeted to be completed by 1Q2017.
UM land is also reportedly in talks to acquire two plots of land measuring 80.9 hectares and 121.4 hectares in the Iskandar region. VADS, a wholly-owned subsidiary of Telekom Malaysia (TM), has launched a groundbreaking ceremony for its two-phase purpose-built data centre in Nusajaya Tech Park.
It will house TM Iskandar international gateway, will serve as a regional hub in providing services such as end-to-end managed ICT services, BPO services, Cloud Services via Digital Marketplace and high-speed broadband connectivity, serving customers in Malaysia and the ASEAN region.
The first phase of VADS Nusajaya Data Centre is scheduled for completion in 1Q2017.
Tokyo-based Mitsui and Co Ltd has entered into a joint venture agreement with Nusajaya Tech Park Sdn Bhd to undertake a 10.7-hectare development, comprising built-to-suit (BTS) properties for lease.
The project will have an estimated GDV of RM468 million over four years. EcoWorld has launched Eco Business Park III. Located next to Eco Tropics in Kota Masai, Pasir Gudang, the project offers 120 units of cluster factories and 86 units of semi-detached factories with built-up areas from 4,000 sq ft and 6,000 sq ft respectively.
Without any exciting news in the 2016 Budget, the cooling measures and tighter lending conditions implemented in 2014 is expected to continue to cool down the property market, especially for the high-rise residential units.
The general focus of interest in Iskandar Malaysia will be the progress of the High-Speed Rail (HSR) and the Rail Transit System (RTS) as these infrastructure projects are expected to enhance the property market around the designated stations.
Currently, developers are cautious about property launches especially for the high-rise residential units in view of the slower absorption rate. The region will take time to digest the existing and incoming highrise residential supply.
The full impact of the Goods and Services Tax (GST) has yet to be ascertained, although the general perception is that all goods and services have generally increased in prices. Landed properties are still favoured by the locals although it is expected that in the coming years it will be challenging as more developers are turning into landed developments with new and exciting concepts.
DISCLAIMER: The data above represents the findings of Knight Frank and is not in any form and endorsement or recommendation by iProperty.com. Readers are encouraged to seek independent advice prior to making any investments.
This article was first published in the iProperty.com Malaysia March 2016 Magazine. Get your copy from selected news stands or view the magazine online for free at www.iproperty.com.my/magazine. Better yet, order a discounted subscription by putting in your details in the form below