Aerial view of i-Park@Indahpura
Improved infrastructure, government incentives, cheaper cost of labour and a lower ringgit are some of the factors driving the industrial property segment in Iskandar Malaysia, says VPC Alliance (JB) Sdn Bhd director Tan Beng Sooi.
These factors have made it the most resilient property subsector in the growth corridor. In addition, apart from the industries relocating from across the Causeway, the local and Singapore companies already operating in Iskandar are expanding, say property consultants.
Tan, a registered valuer based in Johor Baru, says his firm continues to receive enquiries from industries in Singapore that are looking to relocate their operations to Iskandar. This is not surprising, he adds, given the scarcity of land on the island, which does not offer industries the opportunity to expand.
Alpha Marketing director Ryan Khoo is similarly positive on Iskandar's industrial property segment. "Johor has achieved record highs in manufacturing investments in the past three years and has the highest investments among the other states in Malaysia ... much of this is due to the oil and gas work in Pengerang and the ongoing migration of Singapore-based manufacturers to Iskandar," he says.
Savills (Malaysia) Sdn Bhd deputy managing director Paul Khong also attests to the subsector's vibrancy, pointing to the land sale transactions as well as relocations. "It is a natural and cheaper alternative for companies to look into JB, which has been dubbed the Shenzhen of Singapore," he says, adding that the firm is currently undertaking a major relocation and expansion exercise of a large multinational corporation (MNC) to Iskandar.
"This will be its new regional logistic distribution centre with a total built-up exceeding 500,000 sq ft," Khong says. More of such relocation exercises can be expected in the next few years, he adds.
Just last month, Coca-Cola announced that it would be winding down its manufacturing operations at its bottling plant in Tuas (eventually closing it in February 2016), and moving its operations to Malaysia.
Outlining some of the developments on the industrial front, Knight Frank Malaysia says in its Real Estate Highlights for 1H2015 that apart from the Pengerang Terminal Phase 1 at the Refinery and Petrochemical Integrated Development (Rapid), Petronas is working together with Dialog Group Bhd and Royal Vopak to develop Phase 2, which is estimated to cost almost RM12 billion. It includes the construction of a storage facility of about 2.1 million cu m and a deepwater jetty to be built on a 157-acre site. The first commercial crude oil tank farm in Southeast Asia by Vopak started operations in March.
Earlier this year, Telekom Malaysia Bhd signed an agreement with Nusajaya Tech Park Sdn Bhd for the purchase of a 7.94-acre freehold land parcel in Nusajaya Tech Park, where it plans to develop a data centre.
i-Park@Indahpura detached factories
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The Edge: Industrial Properties Still Going Strong