Is the fire still burning for Nusajaya?

Now that 2015 has started and the first quarter of the year is nearing its end, what is the state of affairs down here in Nusajaya? I will divide my answer to this question into two: bricks and play - i.e. from a property market (bricks) perspective and from a quality of life (play) viewpoint.

Bricks

The property market enjoys currently a good supply situation which puts pressure on rents - if you are a tenant those are good news, since rents have gone down a bit and you actually have a choice between several properties. Gone are the days when landlords had a waiting list of people wanting to rent their houses for increasing sums of money. Having said this, from our experience in the last 6 months the rental demand has increased and good quality houses can find tenants easily at rents which are still above the 2009-2011 level, but below the 2012/2013 level. To give an example from our own portfolio, our semiD in East Ledang was let in 2010 for RM7,000 and the rent increased slowly to a maximum of RM10,000 in 2013 and is now down to RM8,000 (end 2014). These figures correlate with other houses we have and anecdotal evidence from other landlords. 
What we are seeing is in my opinion a balancing of two factors, the increase in population and the increase of housing supply in the prime property sector. The master planners of Iskandar have planned this quite well so far. At least when it comes to landed properties. There are and have been times when the increase of supply is not quite balanced with the increase of population, and vice versa - but so far it always balanced out at one point, just like a pendulum - going too far into one direction and then the other until it finally finds its balance in the middle. 

image

Whether this is also true for the condominium / serviced apartments sector remains to be seen. I saw a presentation from a valuer, Mr Wee Soon Chit (of Land Serve Johor) at a recent event (the Iskandar Malaysia Business & Investment Forum) and he showed a slide which suggested that even the condominium construction may be in tune with estimated population growth with only a slight future oversupply situation. The question remains however whether the anticipated population growth will be the kind of population who can afford what is in Malaysian terms very expensive housing.

So is the outlook positive then? Driving around the area you see lots of factories being built, e.g. on the way to Gelang Patah the industrial area of Nusa Cemerlang is being extended, an area which has lots of local and international manufacturers such as FMC Technologies, Fastenal etc. Not far from there is the new Nusajaya TechPark, a development joint venture between Ascendas of Singapore and UEM. And the SILC industrial park which focusses on logistics companies is also being extended. At the same time the port tanjung pelepas (PTP) is expanding. There are new factories being set up in the Senai area where the airport is. And there is a huge oil and gas area in the making a bit further a way on the East coast. All these developments mean there will be more people moving into the area. And this in turn will mean that there will be new demand for housing. The market will definitely be more competitive - there are more houses now and there are also apartments, so the smaller houses (terraces and semiDs) might have to compete with those. If you are a landlord you have to deliver better quality to stay ahead of the game. And as a tenant you will have a better choice at better rents for the foreseeable future.


Play

Nusajaya has experienced a lightening storm of development in the last 6 years (and still is) and has come a long way from AEON Jusco Bukit Indah just opening its doors in 2008/2009. Now there are many more shops and shopping centres, some of them well run such as the Johor Premium Outlets and some less well such as Medini Mall next to Legoland. Especially Bukit Indah, a SP Setia development, has given the area a boost at the very beginning. UEM’s retail projects such as Anjung Neighbourhood Mall, Medini Mall, Puteri Harbour were slow to come off the ground. Empty shops and shop closings show a dim light on UEM’s capability of managing its assets. But even these shopping and dining centres will improve over time, just at a so so much slower pace than a completely privately owned company would have been able to achieve. Puteri Harbour especially is shaping up quite nicely, with beautiful dining establishments such as Spice & Grill. Another milestone for Puteri Harbour will be the new and very modern convention centre which is currently under construction:

image

For kids there are now several theme parks in the area (Legoland Malaysia, Red Cube aka Hello Kitty, Angry Birds and the Lat’s Kitchen dining experience). There is a Marks & Spencer in JB’s new JBCC mall with other more upmarket shops. And there is a new and nice Tesco’s Extra in Skudai/Mutiara Rini around 20min from Nusajaya. More new businesses are opening this year. Nusajaya is slowing reaching critical mass in a way that businesses become interested to cater to the local population. Gone are the days you could drive into the Nusajaya roundabout without looking, there is traffic now and it is growing. The local (but international) Senai Airport is also expanding and from October a new airline (Flymojo) will use the airport as its main headquarters suggesting that there will be new destinations added to the current ones of Air Asia, Malaysia Airlines, Firefly and Malindo Air who are already using the airport. The ferry to Harbourfront Singapore has still not happened but is being announced in monthly intervals, only to be rescheduled to a later date. It seems the ferry operator has still no agreement from Singapore’s authority for the requested 90 minute route. Why not have a ferry go from Puteri Harbour to Raffles Marina (only circa 15 minutes) remains a mystery. 

In a nutshell, loads is happening in Nusajaya, and it is still growing like mad.

Malaysia is one of The Lucky Seven (Fortune Magazine)

According to Fortune Magazine Malaysia is one of the seven countries worth investing in. 

This is an excerpt of what Fortune Magazine writes in its February 2015 edition:

“So where, now, should companies turn for their strategic investments? Well, that has everything to do with what they should look for: stability and resilience. And for that we found seven smart bets. In short, these are markets where it would seem good governance and sustainable growth are likely to go hand in hand.Voters tossed aside underperforming governments in India and Indonesia last year to elect talented politicians promising positive change. Real reform is now on the agenda in both countries. Meanwhile, in Malaysia, an incumbent government is offering credible pledges for smarter economic management. All three will benefit in coming months from less conflict in the region. With domestic economic reform also on the agenda in China and Japan, leaders of all of Asia’s most powerful states have good reason to avoid the kind of conflict that can destabilize economies. Worth noting is that India, Indonesia, and Malaysia also benefit from political and commercial competition for regional influence among the U.S., China, and Japan.

Malaysia
In Malaysia, the incumbent government is trying to stay ahead of increased demand for change. Prime Minister Najib Razak scrapped fuel subsidies and will enact a 6% goods and services tax in April to improve his government’s fiscal position. Najib will likely accelerate his Economic Transformation Program by introducing further tax incentives for foreign investors. Further liberalization of the manufacturing and financial services sectors is likely as well. It’s a fair bet that as growth tapers in China (and the impact of that slowdown is felt in Malaysia), Najib’s government will feel pressure to boost public spending on infrastructure, education, and health care. That’s a good thing—particularly if authorities, as expected, continue to advance a broad fiscal reform agenda, with support from the middle class, to balance the nation’s budget by 2020.”

To read the full article click here.

Punggok Rindukan Bulan: Bukit Chagar becomes the JB terminal for the JB > Singapore RTS link

It is finally official: the Johor Bahru terminal for the rapid transit system (RTS) link between Johor Bahru and Singapore will be in JB’s Bukit Chagar area: see http://www.nst.com.my/node/35315

Bukit Chagar is located behind the main train station ‘JB Sentral’. The plot of land is now mainly empty after dereliction of low cost flats which were built there in the 1980s. These apartment blocks were an eyesore for JB’s city centre and their demolition in 2008 was one of the first steps towards JB’s regeneration.

There is an interesting blog post by Blogger 'oldstock’ who took pictures before and after demolition of the apartment blocks: http://oldstock.blogspot.com/2008/07/dust-settles-on-bukit-chagar-flats.html

The Bukit Chagar flats were also featured in an indie movie called 'Punggok Rindukan Bulan’. The title of the movie is a Malay proverb 'the owl longs for the moon / is unhappy in the absence of the moon’, meaning an 'unfulfilled longing’. In the movie it is the longing of a father and a son who cope with the absence of a key female figure in their lives. One is tempted to draw a comparison and to say that there is now hope that the new purpose of the Bukit Chagar area will fulfill the longing of many Johoreans to be better connected to Singapore where many of them work. A longing fulfilled, rasa rindu tertunai.
More info about the movie Punggok Rindukan Bulan:

http://www.dahuangpictures.com/blogs/rindu.php/2008/07/03/p458#more458

and pictures from the movie: http://s276.photobucket.com/user/sinemazharr/library/Punggok%20Rindukan%20Bulan?sort=3&page=1

After nearly a year of negative news and political turmoil, hot and cold showers in the form of increase in toll fees on both sides, Singapore vehicle entry fee increase, disputes over reclamation works, oversupply of condos, not enough low and medium cost housing, unclear news and rumours about restrictions to foreign ownership (which turned out to be wrong) and many more - after all these mainly negative sentiments, positive news are now coming out again: the decision on the JB terminal, the progress of the HSR link between KL and Singapore, the plan to have hourly trains from JB to Singapore, some big investments (and with it new jobs) by firms like Bostik, the development of the huge oil & gas area in Pengerang, the opening of Komtar/JBCC with Marks & Spencer and also: the planned gazetting of Kampung Sungai Melayu as a heritage village - all positive news. Let’s hope they keep coming.

Rail link Puteri Harbour > Jurong Lake?

The high speed rail link (HSR) connection between KL and Singapore may go via Puteri Harbour, according to the Malaysian newspaper The Rakyat Post. This would make sense since the distance between Malaysia and Singapore at Puteri Harbour is only around 700m and the waters are quite shallow. On the Singapore side the stop is supposedly at Jurong Lake.

Read the full article which refers to a government source here: http://www.therakyatpost.com/business/2014/08/18/kl-singapore-high-speed-rail-likely-ending-jurong/

Here the map of the proposed route of the HSR:

image

Another interesting fact mentioned in the article is that statistics show that the Causeway is 33% above capacity. It’s strangely comforting to equate a number to the frustrated feeling everyone has who has to cross the border via the Causeway. It would be interesting to see the numbers for the Second Link.

 

Sentiments

In the last few months there was a bit of negative sentiment about Iskandar Malaysia, mainly because of the crazy traffic situation at the Second Link border between Malaysia and Singapore. When it took some people 45 minutes to go to work in Singapore’s CBD, it now took them sometimes 2 hours or even more. This put a strain on people’s family life. 

Who’s fault is it? The unanimous verdict of commuters is that Malaysia beats Singapore 10:1 when it comes to border efficiency. Not only is Malaysia’s border better designed, it is also better staffed and the check is done quickly and efficiently. The Singapore side on the other hand suffers from long queues, bad design, slow handling of passport control. In addition there seems to be lack of staff and lots of counters are closed.

The loosers? Apart from people wanting to cross the border, the biggest looser is Singapore’s reputation for efficiency and good management. The country is well known for it’s pride in Changi Airport’s world class ranking. And everyone who has ever travelled through Changi has to be impressed. The airport looks spotless, relaxed, elegant and you never wait long, neither for your luggage nor at passport control. Why has the land border to be the pure opposite of this? Stressful, inefficient, slow. Maybe someone should start a border efficiency ranking and Singapore’s government would quickly make sure to reach the top ranking. Is it pure lack of accountability which lead to this situation in the last few months or is it something else? It seems to have started with two border breaches, where on two occasions people managed to somehow cross the border without proper control. This may explain the current overreaction but it does not justify it.

There is also bound to be a significant loss for Singapore’s economy which relies on Malaysian workers crossing the border every morning into Singapore.

Together with some infighting in Malaysia, where the Johor Sultans role in the Johor state administration and his own business dealings are being questioned, this has lead to a more negative sentiment towards Iskandar Malaysia.

Patience though is a virtue. There were bound to be rocks on the way and navigating around these is the task of the day. On the ground, the business people and (in Malaysia’s case at least the federal) government officials are going full steam ahead. Yesterday marked the ground breaking of Nusajaya Techpark, which has already a 40% commitment rate for the 200 factories under construction, mainly for precision engineering, clean manufacturing and logistics firms. At the opening ceremony Singapore’s Minister for Trade & Industry Lim Hng Kiang stated that Singapore has invested 23% of its foreign investment in Iskandar Malaysia.

Other positive news were that Huawei is opening data centres in Nusajaya in the next few weeks.

A mid to long view also helps to see through the current fog: the transport links can only improve. Knowing Singapore, the government will at one point realise that they need to stand up to their reputation. And in 2020 the High Speed Rail line between Kuala Lumpur and Singapore will apart from having only one border check, improve the travel time between Nusajaya and Singapore significantly: it will take only between 5 and 10 minutes depending on where the Singapore station will be (at the new (2016) Tuas West MRT or the Jurong East MRT). On Nusajaya’s side the most likely stations will be either Gerbang Nusajaya or Sunway Iskandar. Before this HSR link there will be in 2018 the RTS connection between Johor Bahru and Singapore’s new Thompson Line.

So apart from stronger transport links there is plenty development within Malaysia. This justifies a strong believe in a growing local economy, a great return for investors and good job opportunities for citizen and residents.

Older Posts

Custom Post Images

Nusajaya is a regional city located in the south west of Johor, Malaysia at the border to Singapore.
Browse our site for more info about life in this new city.
Stacks Image 13

To view properties for rent click here