theSun Property June 2015

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ON FRIDAY JUNE 12, 2015
WHILE the feature last
week delved into the
characteristics to look
out for before
purchasing or investing in a piece of
property, over the next fewweeks
we highlight hot spots (deemed by
industry professionals).
ALL THE RIGHT INGREDIENTS
If there is one place with all the
“right ingredients,” it has to be
Pengerang, which is located on the
south eastern coastal tip of Johor,
adjacent to Singapore. Known to
many Singaporeans for its seafood
and a cycling destination, the town
also has a small customs and
immigration post, many religious
temples, along with aWorld
War II heritage trail near Tanjong
Pengelih. Theremight not bemuch
happening in this “relatively
unpopulated” sleepy town that is
home tomostly fishermen and
farmers but all this will soon change,
looking at themega development
projects on the drawing board and
some that have already begun.
For those who attended the talk
by Ryan Khoo (co-founder of Alpha
Marketing) at a PropertyGuru
seminar, youwould be aware of the
fewprojects (as named below) that
place Pengerang under the “good
DNA” category. “Pengerang is
definitely a hot spot for property
investment today. In fact, there has
been a flurry of activity there in the
past one year, especiallywith regard
to land transactions. This is driven
by the large RM89 billion Rapid
project (the biggest infrastructure
project in the whole of Malaysia) by
Petronas and the upcoming tourism
projects by Khazanah in nearby
Desaru,” reasons Khoo. Moreover,
the large under-supply of
infrastructure and real estate in
the area has also led to high
rental yields.
Here are some of themega
projects said to boost real estate and
the economy down south:
1) Pengerang Integrated Petroleum
Complex (PIPC) – arising from
the Economic Transformation
Programme for amore
progressive and dynamic oil and
gas industry. The 20,000-acre
project will house oil refineries,
naphtha crackers, petrochemical
plants, a liquefied natural gas
(LNG) import terminal and a
regasification plant. All these will
create jobs whichwill require
workers (100,000 estimated), and
workers will need housing. Total
investment for the PIPC project is
approximately RM97 billion.
2) Pengerang also has easy access to
existingmajor international
shipping lanes; for example
Middle East – Singapore – China.
3) It also is adjacent and in close
proximity to Singapore, an
existingmajor trading hub.
4) Pengerang Deepwater Terminal
– a RM5 billion project scheduled
for completion in 2017. The
deepwater jetty facility comes
under the government’s
“Entry Point Projects” and
spreads across 500 acres. It is
said to have the potential to
transformPengerang into
“Asia’s RotterdamPort”
upon completion.
5) Petronas Rapid Project –major
contracts and awards have been
signed, sealed and some started.
Apparently, already RM89 billion
has been spent on this gargantuan
undertaking, withmore expected
as the project is established. This
project comes under the
Pengerang Integrated Complex
(PIC), which is part of the larger
PIPC (graphic). The Rapid project
is estimated to cost RM57 billion
while the associated facilities will
cost a further RM40 billion. This
project alone expects to employ
some 70,000workers during
construction. It estimates
creating approximately 4,000
new jobs upon completion.
Many projects within this project
will help spur economic growth
in the region, as well as attract
domestic and foreign
investments.
6)Malaysia-Singapore high-speed
rail (HSR) project – the RM40
billion project is said to create a
new line connecting Jurong
East to theMalaysian capital in
Kuala Lumpur.
7) Rapid Transit System (RTS)
which is anMRT line that links
Singapore to JB city centre.
8) Desaru tourismprojects –
“Quite a long story here as well,”
says Khoo.
[*Note: Both theHSRandRTS
projects will not impact Pengerang
directly but it will help in promoting
the greater Iskandar-Pengerang
locality overall, as it will improve
connectivity between Singapore and
Kuala Lumpur.]
Looking at the huge amounts to
be spent on thementioned
gargantuan projects over the next
five years, Khoo says: “Land prices
have already started tomove up
quite a fair bit as investors have
begun tomove in since the Rapid
project started. It is not easy to find
good land to purchase in Pengerang
today … buyers will need to do their
‘homework’.”
SURROUNDING PROJECTS
With the limited choices of property
to buy in Pengerang at this time, the
few that are available are in the
Pengerang/Desaru vicinity include
“Sebana Cove by IJMandDesaru
Utama byMahabuilders,” Khoo
informs.
“More projects are expected to
be launched in the comingmonths
as demand is simply outstripping
supply. Moreover, more
investments are being pumped in
and the working population is
growing quickly in the area,” Khoo
adds.
While themedia has been quite
negative on IskandarMalaysia in
recent months, those in the know
are actually quite pleasedwith
economic activity in Iskandar,
which include:
Opening of GleneaglesMedini in
July 2015. The first major private
healthcare provider inNusajaya
with an estimated capacity of 300
beds and CPFMedisave enabled.
This has a bigmarket for both
Singaporean and Indonesian
market. A few international
healthcare providers are also
doingmarket studies and looking
to enter this market here.
Opening of Raffles American
School main campus in end 2015,
together with the University of
Reading andMDIS Iskandar
main campus. Expected to add
some 2,000 to 3,000 student
population toNusajaya. We are
also awaitingmore
announcements on Educity
Phase 2 andmore institutions
coming into the east at Bandar
Seri Alamas well as the
vocational schools planned
in Kulaijaya.
Johor is now the No 1 state in
Malaysia attracting
manufacturing investments in
2013 and to date in 2014. A big
point considering Klang Valley
and Penang are the usual
winners. Jobs in this sector
expected to be seen in full by
2016/2017 once these factories
are completed.
Angry Birds opens on 31st Oct
2014 andwe await the
announcements on Sunway
Iskandar’s own theme park. Also
good progress on the theme
parks inDesaru and in Austin
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Heights. We also await some
potential good surprises on other
theme parks and the ferry service
to Singapore currently in
negotiation at Puteri Harbour.
Pinewood Studios has a full
schedule in 2015 – Astro, Imagica
and its own productions are
heavily in the list, creating
thousands of jobs in 2015 and
beyond. More space apparently
is required for expansion.
Pengerang’s Rapid project is on
full swing – RM90 billion is
pouring into the local economy
and Iskandar is the nearest urban
hub, likely to see some spillover
from it especially into east Johor.
High Speed Rail and Rapid
Transit System– The HSR and
RTS are likely to be announced
in early 2015 withworks to start
in end 2015, giving further
impetus to those on the fences.
We expect this to be the biggest
“buy” or “investment green go”
signal and have further big push
impact to Iskandar.
Comprehensive Development
Plan 2 (CDP 2) – IRDA should be
ready to announce this in early
2015, providing clearer insights to
land use and future plans for
IskandarMalaysia and triggering
some parties tomake decisions
here.
Although property prices have
gone up quite a fair bit in Pengerang,
it is still quite affordable compared
with IskandarMalaysia or Klang
Valley being a location that is in the
midst of developing. “Iskandar
Malaysia will also benefit from the
Pengerang/ Desaru boomas it is the
nearest urban city to Pengerang/
Desaru. Much of the investments
and population at Pengerang will
flow from Iskandar. Besides, there
aremany operations / set-
ups in Iskandar as well.
Most notably, the
industrial parks in Pasir
Gudang – as they are the
nearest existing industrial
zones to Pengerang … and
both Johor Port and
Tanjung Langsat Port are
there, the two nearest
ports to Pengerang. In fact
many of the suppliers/
manufacturers supporting
Rapidwill be from
Singapore and Kuala Lumpur, and
will likely operate at least partially
out of Pasir Gudang,” shares Khoo.
Industrial property in Iskandar is
said to have long termpotential due
to the rising cost of labour and land
in Singapore, which is slowly
pushingmany Singaporean
manufacturers out toMalaysia.
Followour article next week
to learn of another hot spot in
the peninsula.
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queries to: propertyqs@
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> Exploring residential propertywith positive DNA
Property hot spots:
Goodbuys PART2
Crude & LNG Import
LNG
Regasification
Plant
Residential and Commercial Areas
To National Grid
Into PGU
Buffer Zone
Industrial
Zone
Buffer Zone
Crude and
LNG Storage
Pipeline
Crackers
Oil Refineries
Petrochemical Plants
Power Plant
Preserved Environmentally
Sensitive Area
ILLUSTRATIVE
GleneaglesMedini
Raffles American School
Pinewood Studios
SUNPIX
PENGERANG INTEGRATED PETROLEUMCOMPLEX (PIPC)