Friday 29 Mar 2024
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Choice assets in Johor Bahru's growth corridor!


Since the establishment of the South Johor Economic Region in 2006, the south of Johor — comprising of the municipalities of Johor Bahru, Iskandar Putri, Kulai and Pasir Gudang — has become one of the most robust and dynamic economic corridors in Malaysia.

Now known collectively as Iskandar Malaysia, the region has attracted cumulative committed investments worth RM244.46 billion up to September 2017 — with RM103.55 billion, or 42.4% realised.

Iskandar Malaysia is also set to take the stage as Asia's leading powerhouse — led by Johor's state-owned investment arm Johor Corporation with Malaysian investors playing an active role in the development of Iskandar Malaysia.

"The retail, commercial, industrial, healthcare, food and beverages (F&B), hospitality and education industries are growing rapidly in Iskandar Malaysia, due to local companies taking the cue from the government to play their part," says Damansara REIT Managers Sdn Bhd's CEO Wan Azman Ismail in an exclusive interview with The Edge.

"And one of the best entities with exposure to the Iskandar Malaysia growth story is the Al-Salam Real Estate Investment Trust."

The trust was set up in 2015 by Johor Corporation to hold its investments in F&B, retail, commercial, industrial and hospitality real estates.


A retail haven

Johor Bahru's unique location next to Singapore ensures that it benefits from the hordes of Singaporeans shopping in the city — all taking advantage of the stronger Singapore dollar — this in turn provides the city with a vibrant retail scene. According to the Economic Census 2016 by Malaysia's Department of Statistics, Johor contributed RM11.4 billion to Malaysia's tourism industry, the third largest after Selangor and Kuala Lumpur, and ahead of Penang. As such, with many plans for tourism products to be developed in Johor, the state is set to receive more domestic and international tourists in the years to come.

"In turn, Al-Salam REIT will benefit from the continuous growth of Johor as a tourism and shopping haven in Southeast Asia, as it owns KOMTAR JBCC, a premium mall which is located right in the centre of Johor Bahru," says Wan Azman.

KOMTAR JBCC — with 20% of its footfalls being Singaporean — is expected to attract more visitors, with the planned development of the Johor Bahru-Singapore Rapid Transit System (RTS).

"The RTS will make travelling between the two cities seamless and will allow Singaporeans and foreigners living in Singapore to come to Johor without having to take the notoriously traffic-choked Causeway or Second Link.

“Developments within the Johor Bahru city centre and its surrounding areas, including the Ibrahim

International Business District (IIBD), will be positive for Al-Salam REIT’s KOMTAR JBCC,” says Wan Azman.

“Johor Corporation has recently developed an office tower at KOMTAR JBCC, which will add more vibrancy to the whole development. This, coupled with the connecting bridge to Persada Annexe, will expand our captive market for KOMTAR JBCC. “Although we benefit from Singaporean visitors into Johor Bahru, we do not want to be too dependent on them to drive our growth. The current level of 20% of shoppers from Singapore is about the right fit for us,” Wan Azman says.

Besides KOMTAR JBCC, Al-Salam REIT also owns the 25-storey office tower at KOMTAR JBCC. And Johor Corporation has recently completed the development of Menara JLand at KOMTAR JBCC, while a private developer is developing the Holiday Inn hotel there.


IIBD to benefit JB most

Nestled within the heart of Johor Bahru city is the Ibrahim International Business District (IIBD).

"Launched on November 23, 2015, IIBD will act as a key lighthouse project, driving transformation of Johor Bahru's business district and the city as a whole and accelerating the state's rising generation of entrepreneurs and investors, which bodes well for Al-Salam REIT's KOMTAR JBCC and Menara KOMTAR", says Wan Azman.

IIBD is a transformation plan spearheaded by the Johor state government to turn Johor Bahru into a "˜metropolis of international standard' and will become the southern state and Malaysia's latest economic growth nodes. The project has an estimated gross development value of RM20 billion to RM25 billion.

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