Iskandar Malaysia (IM), is a strategic and important special economic zone located at the southern-most tip of Peninsular Malaysia and mainland Asia. South Johor is a geographically and economically important region with key industrial, logistics and commercial centres. IM will benefit from the economic opportunities that will be promoted within the Region. Identified as one of the key catalysts and high-impact developments under the Ninth Malaysia Plan (2006-2010) the IM will be developed into a major regional commercial hub with first-world facilities. These facilities will encompass logistics and a comprehensive value-added platform with focus on state-of-the-art physical infrastructure and an investment-friendly business environment. Development of the IM offers a meaningful opportunity for the Malaysian Government, working in tandem with the private sector, to drive reforms and innovation in delivery systems, local government, physical planning, infrastructure development and environmental protection among others.
The Comprehensive Development Plan (CDP) 2006-2025 for IM, launched by the Malaysian Prime Minister on November 4th 2006, details the entire development agenda envisioned for the Region. The CDP identified Nusajaya as one of the pivotal and significant catalyst developments to spearhead and boost IM’s development. The Malaysian government’s support to ensure Nusajaya’s success is assured. Approximately USD 1.23 billion (RM2 billion) out of the USD 1.22 billion (RM4.3 billion) or 47% of the approved IM infrastructure projects under the Plan that will benefit Nusajaya encompass development/upgrading of highways, roads, airport, drainage and security.
A key driver of the Iskandar Malaysia (IM), Nusajaya with its 24,000 acres of contiguous development-ready land, is one of the largest property development in South East Asia.
Nusajaya comprises seven signature developments – Kota Iskandar (Johor state new administrative centre), the Southern Industrial and Logistics Clusters (SiLC), Puteri Harbour Waterfront Development, EduCity, Afiat Healthpark, International Destination Resort and Nusajaya Residences, all within a city that sets the benchmark for integrated developments across the globe.
Nusajaya is strategically located at the south-western tip of Peninsular Malaysia. It is poised to be the premier and largest fully integrated urban development in South East Asia offering significant investment, financial and business opportunities for local, regional and international entrepreneurs and investors.
Nusajaya is ideal as a new economic growth centre due to its strategic location within the resource-rich state of Johor and proximity to Singapore. It has direct access to ready infrastructure and is linked by a comprehensive network of main roads and the North-South Expressway to major international airports, cargo hubs and seaports. It will also provide state-of-the-art telecommunications infrastructure, world-class facilities and amenities planned in an environmentally sustainable manner enhancing the quality of life in the true sense of the word.
Nusajaya is developed to be the best the world has to offer. A regional city that raises the bar for all integrated developments around the globe, this World in One City is designed and planned to enrich the lives of all who live work and play there. Living and working spaces are created and developed in a manner that gives equal emphasis and importance to parks, greenery and open spaces, buildings and architecture. Nusajaya will be home to a rich and diverse international community with opportunities for the exchange of cultures, customs and cuisine. The living environment is designed to be both home and sanctuary, including not only parks, lakes and greenery in the residential development plans but also placing emphasis on safety and security for continued peace-of-mind. The world class facilities at Nusajaya create an environment that cater to both the family and individual’s physical, mental, emotional and spiritual health and wellness. It is an environment that is sustainable and nurturing – an ideal environment for young families desiring world class educational and recreational facilities that can further strengthen the family bond.
Business opportunities are aplenty in Nusajaya. The availability of knowledge workers and skilled human capital is greatly enhanced with the availability of tertiary education provided by the best university faculties in the world. The working environment is designed for better efficiency, increased productivity and provide inspiration – an environment that brings out the best in the people that work and do business here. Retail, entertainment and F&B businesses have enormous potential to flourish as they serve the international community of this cosmopolitan metropolis.
Nusajaya is also a city of excitement and activity. Its recreational environment invites us to carefree and exciting experiences that rejuvenate and reinvigorate. An environment that encourages and facilitates expression and the Arts and offers diverse entertainment and culinary experiences. Sidewalk cafes, waterfront eateries and gourmet restaurants, clubs and venues featuring live music, theatre and dance – a virtual smorgasbord to meet every discerning tastes. Being a part of Nusajaya is being a part of the best the world has to offer. It is an enriching experience regardless of whether you live, work or play there. Experience life the way it should be lived at Nusajaya – The World In One City.
“Nusajaya complements Singapore”
Nusajaya is a key driver of the Iskandar Malaysia (IM), an emerging economic zone in South Johor, Malaysia. Designed to be Asia’s foremost integrated city, Nusajaya is about the convergence of diverse developments on a scale and diversity that has never before been attempted in Malaysia, and is positioned to be the largest and premier fully-integrated urban development in South East Asia. The city is located at the south-western tip of Peninsular Malaysia and is strategically situated in close proximity to Singapore with Singapore’s Central Business District a mere 24km away.
The principal thrust of Nusajaya’s development strategy is to offer the global business and residential markets a sustainable and well-planned community set against a backdrop of landscaped parks and gardens complete with water features and a backdrop of Malaysia’s natural beauty. This iconic, integrated development is propelled by nation-building aspirations, commercial vigor and commitment to stakeholder value enhancement.
The Iskandar Malaysia was conceived as the centre of the Johor-Singapore-Indonesia Triangle. Two and a half times the size of neighbouring Singapore, Iskandar Malaysia was designed to be a fully integrated region of global standard, where all aspects of living – business, entertainment, accessibility and the environment – are integrated as one to create a world-class metropolis.
Iskandar Malaysia is divided into five economic flagship zones, of which Nusajaya lies in the centre. The five flagship zones are:
Singapore’s bullish performance
The Singaporean economy is in its fourth year of strong growth, with growth rates as high as 8.1%, and has performed better than expected. This has prompted the Singaporean government to upgrade its growth forecast from a previous estimate of 5–7% to 7–8% for the year 2007. 
Singapore has been able to maintain its strong economic growth through a clean and efficient government system, good business practices and living conditions, and also by having one of the world’s best education systems. This trend is set to continue with upcoming major developments and investments, which include the much touted Integrated Resorts (“IRs”).
The heartbeat of Asia
Resorts World at Sentosa will require a total sum of USD 4.14 billion in investments to be developed, and is scheduled to open by 2010. Resorts World is envisioned to be a large-scale family resort – and will contain Universal Studios Singapore and thirteen hotels to provide lodging to those attracted to its casinos, beaches and golfing.
However, these IRs aren’t the only ones creating a buzz in Singapore. Other famous attractions are also undergoing major facelifts, costing millions of dollars. Orchard Road, the country’s main shopping belt and most visited attraction, will undergo a USD 27.6 million rejuvenation. The makeover will include landscape and infrastructural enhancements, and will bring new lifestyle experiences. Work on the rejuvenation is expected to be completed by April 2009. 
Sentosa Island is being developed by Sentosa Leisure Group to become a lifestyle destination. The makeover, which includes the Resorts World and a mega yacht marina, will cost at least USD 8.3 billion, 50% higher than what was originally budgeted. Investments have been made to improve infrastructure and accessibility to and around the island.  Sentosa Island is also home to Sentosa Cove, Singapore’s first waterfront property development with multimillion-dollar seafront homes and condominium complexes among others. Sentosa Cove homes are nearly sold out, with foreigners accounting for more than half of the buyers. 
Challenging times ahead
Increasing living costs
The Ministry of National Development of Singapore announced on 6th December 2007 that it intends to release 17 new sites under its Government Land Sales (GLS) programme in the first half of 2008. Twenty unsold sites will be carried over to next year from this year’s list, bringing the total number of sites to 37. These 37 sites will comprise 21 residential sites, 3 commercial sites, 2 white sites, 10 hotel sites and 1 commercial & residential site. These sites could generate up to 8,250 private residential units, 101.3 acres gross floor area of commercial space, and 5,850 hotel rooms.
However, only 11 sites (approximately 49.6 acres) have been placed on the confirmed list while the other 26 (approximately 75.4 acres) will be on the reserve list. These 11 sites will comprise 8 residential sites, 2 hotel sites and 1 white site. White sites can be developed for residential, commercial or hotel use.  Even though the government is releasing more sites for sale under its GLS programme, scepticism remains on whether the projected demand for new office space could be met. A similar situation is also seen in the residential and retail segments, which have a stronger influence on inflation. 
Thus, Singapore faces a severe shortage of physical land for land-intensive businesses, and for what they do have available, property costs are sky-high. With the current plan to increase the population in order to sustain economic growth, the shortage of space for further housing is quite pressing. Furthermore, high property prices are generally bad for business; while property is not that expensive as to deal death blows to certain businesses, the advantages to be gained from setting up in a more cost effective location are obvious.
The increase in inflation was also affected by the higher cost of private road transport, as well as the increasing cost of health care. The Land and Transport Authority of Singapore controls the car population by putting a quota on the issuance of the Certificate Of Entitlement. The quota for each year will be based on 3% car population growth rate, taking into consideration the de-registration of cars. The de-registration of cars had declined in the years 2006 and 2007, and thus the issuance of quotas is expected to be reduced next year, increasing the certificate’s premium that will lead to an increase in car prices.
Health care costs have also been pushed up since private and government hospitals raised their charges due to higher wages and other operating costs. Medical cost inflation is currently running at 6% per annum – well in excess of the normal inflation rate. 
External sources are also responsible for an increase in inflation, largely from the rise in oil and food prices. The oil market will remain tight, driving global oil prices to record highs. Oil demand is forecasted to increase at a faster pace in 2008 compared to the last year. Any increases in oil prices are worsened by the limited supply and capacity of both OPEC and non-OPEC producers. The high global oil prices have had a direct impact on the prices of domestic energy-related items. Strong demand and a tight supply of food have led to a continuation of rising food prices due to cyclical and structural factors. Among the factors that contributed to this trend include dry weather in Australia that has constrained output of livestock and crops, and increasing demand of food items coming from stronger income growth in the emerging economies. 
Singapore is also seeing a shift in its population demographics due to a rapid ‘greying’ of the population. The speed at which the ratio of elderly people is increasing is extremely fast, with ‘elderly’ being defined as age 65 or older. In Singapore it takes only 20 years for the ratio of elderly people to double, compared to 40 years in Germany and 85 years in Sweden. The current percentage of those of age 65 and over is 7.5% and will continue to increase, reaching up to 28.6% in 2050. 
Singapore aims to boost its population from 4.7 million to 6.5 million over the next 40 – 50 years. To keep the economy growing and to reduce pressure for wage rises, the government will be opening its gates to more foreigners. In the first half of 2007, about 7,300 new Singapore citizenships were granted.  Singapore has been adding about 100,000 expatriates annually since 1990, with foreigners currently making up 19% of the population. However, Singapore’s open-door policy has made the locals fearful of losing their jobs, as indicated by a poll conducted by a local newspaper. 
Nusajaya is poised to be a world-class city that embodies a diversity of seven signature developments – Kota Iskandar (Johor state new administrative center), Southern Industrial and Logistics Clusters (SILC), Afiat Healthpark, EduCity, Puteri Harbour at the Waterfront Precinct, the International Destination Resort and Nusajaya Residences – making it the most desired city in which to live, work and play. Nusajaya’s overall development is planned and designed to be sustainable, environmentally sensitive and conducive for business, living and leisure. A city that enhances and enriches one’s life, it offers significant investment, financial and business opportunities for discerning local, regional and international entrepreneurs and investors. With 24,000 acres of contiguous development-ready land, Nusajaya is poised to complement the development of both Malaysia and Singapore.
Located within Nusajaya is Node 1, a comprehensive development comprising leisure, residential, financial and high-end industrial components stretching over 96 million sq ft and an approved gross floor area of 188 million sq ft. Node 1 is designed to kick-start the IDR, and is the single biggest development in the region.
With the planned increase in the population of the Island Republic, housing will become an issue that would affect many Singaporeans. Comprising one of Nusajaya’s key developments are the Nusajaya Residences: Horizon Hills, Ledang Heights, and East Ledang. Singaporeans relocating to Nusajaya would enjoy a high standard of living comparable to developed countries but at a much lower cost. Other benefits include easy access to Singapore, the waterfront development of Puteri Harbour that has garnered global interest and participation, the convenience of Nusajaya’s Medical Hub and EduCity, planned regional hubs for healthcare and education, and no restriction on car ownership.
Nusajaya also provides the perfect opportunity for Singaporean companies that require large land tracts for their operations. The Southern Industrial and Logistics Cluster (SILC), located within Nusajaya, provides 1,300 acres of freehold industrial land in an environmentally sustainable setting with easy access to two international airports and five seaports. The SILC will be focused on developing the value chains of integrated ‘clean’ industrial centres in three major areas – Advanced Technologies, Nutrition & Health and Logistics.  Additionally, companies setting up in Nusajaya can benefit from a skilled workforce. Nusajaya itself consists of 24,000 acres of contiguous development-ready land and is developed to be the benchmark against which other new integrated developments are measured.
Nusajaya is accessible from the North-South Expressway, which links all major cities on the West Coast of Peninsular Malaysia between Thailand and Singapore. The North-South Expressway is also connected to other major expressways including the Malaysia-Singapore Second Crossing, also known as the Second Link. The Second Link, which is deemed to be the alternative to the Causeway, provides much faster and easier access to transport people and goods between Malaysia and Singapore. Nusajaya is also within the Singapore – Johor Bahru ring road, as indicated in the picture.
Nusajaya is land-linked to the greater Asian continent and the world by air and sea. The city is within 30 minutes to two international airports, Singapore Changi International Airport (SCIA) and Senai International Airport (“Senai Intl”). Senai Intl is able to handle up to 4.5 million passengers and 100,000 tonnes of cargo per annum. Investments up to USD 297.6 million will be made in the next few years to upgrade the airport’s passenger and cargo facilities. This includes increasing capacity to 10 million passengers per annum, and increasing direct flights to major cities such as Hong Kong, Shanghai and Perth. Senai Intl is within the logistic triangle of IDR, forming an integrated logistic hub for the southern region with linkage to Port of Tanjung Pelepas and Johor Port. 
The Singapore Changi International Airport was ranked 25th out of the world’s largest airports by passenger volume, handling 32 million passengers in 2005. Currently its passenger traffic is forecasted to grow at a rate of 7%. The airport is served by 80 airlines that fly to over 180 cities and register over 4,000 scheduled flights weekly. 
The Tanjung Langsat Port was designed to complement Port of Tanjung Pelepas and Johor Port. Currently, the port is in the midst of implementing its Physical Development Plan. Upon completion in 2012, the port’s facilities will include a marine support base, liquid cargo terminal, multi-purpose wharves and a jetty capable of handling medium-range tankers up to 30,000 deadweight tonnes. The port’s activity will focus on petrochemical industries, which will pose serious competition to Port of Singapore, already on the receiving end of complaints over high costs. 
Iskandar Malaysia Incentive and Support Package
In order to be eligible for the ISP, potential applicant companies must be approved by Iskandar Regional Development Authority (“IRDA”) and must carry out qualifying activities in designated zones for customers within the zone and outside of Malaysia. These qualifying activities or commercial development initiatives include those within six targeted sectors in IRDA-approved zones. These sectors or industries are:
The incentives available under the ISP are:
On 9th October 2007, IRDA announced its latest ISP, currently limited to Node 1 within Nusajaya. The incentives, which are divided into fiscal and non-fiscal, are available for Iskandar Malaysia-status companies, and have been extended to approved developers, approved development managers and foreign knowledge workers. The incentive packages are as per listed below: 
The story of Singapore’s economic boom is one of the success stories of the 20th century. The Republic has handled its limited resources well and created a robust economy that is still posting impressive growth rates. But the reality of the situation is, Singapore is a country constrained by its physical size; this issue will become even more pressing as it engineers its population growth for economic reasons. The Iskandar Malaysia provides the perfect solution to Singapore’s looming issues by providing what it needs most: space, accessibility and a lower cost of living and doing business. Despite concerns that the Iskandar Malaysia would compete with Singapore, it is when the two work together and complement each other that the greatest benefits are to be gained.