Iskandar investment boom continues

The Straits Times

NEW investments in Iskandar Malaysia more than doubled in the second quarter compared with the first three months of the year as the zone’s boom continues to roar along.

The region recorded RM9.72 billion (S$3.8 billion) in new investment in the three months to June 30, bringing the year’s total so far to RM14.56 billion.

That half-year total is on track to equal or surpass last year’s investment figure of RM25.33 billion.

The second quarter surge came from new spending in the property, manufacturing and finance sectors, an Iskandar Regional Development Authority (Irda) spokesman told The Straits Times.

While the first and second quarters have seen “good investments”, Irda co-chairman and Johor Menteri Besar Mohamed Khaled Nordin said he expects investor confidence to keep growing throughout the year.

China’s Greenland Group was one of the bigger spenders in the second quarter, paying RM600 million to Iskandar Waterfront Holdings for about 5.6ha in Danga Bay, where it plans to develop properties worth about RM2.2 billion in gross development value.

It also bought a 51.8ha plot in Jalan Tebrau. Despite Greenland’s entry into the Iskandar property market, China is lagging behind in the spending stakes. Singapore was the biggest investor in the first half of this year, followed by the United States, Spain, Japan and the Netherlands.

Among the companies that invested in Iskandar in the first half of this year was Compass Wool Processors, fully owned by Singapore company NK Ingredients.

The firm is spending $50 million on a new plant in Southern Industrial and Logistics Clusters Nusajaya. NK Ingredients plans to use the grease extracted during wool processing to manufacture lanolin for cosmetics and other derivatives at its Jurong plant.

Compass Wool business director Stefan Bernerius said: “Iskandar is a good logistics hub for the wool textile supply chain. It is located not far from the parent company and caters to its need for wool grease.

“It is also less complicated than China, and less risky compared with other low-cost South-east Asian countries.”

The investment cash should keeping coming in, with the creative, health care, financial services and logistics sectors continuing to attract new spending this year and next year, said Irda chief executive Ismail Ibrahim.

CIMB regional economist Song Seng Wun said these sectors, while part of a more integrated development plan, partly ride on the needs of Singaporeans. “For example, with our ageing population, Singapore needs more options when it comes to health care.”

From 2006 to June 30 this year, cumulative committed investment for Iskandar reached RM146.20 billion, of which 64 per cent came from Malaysian investors and 36 per cent were from foreign ones.

As at April this year, Singapore has been the largest source of foreign investments in Iskandar, with about RM11 billion coming from or through the country – primarily in manufacturing, education, health care and property development. Mr Song said all investment should complement the growth of Johor while also supporting Singapore’s growth as it provides opportunities to businesses here.

“(But) sustainability could be a question in the real estate segment, where potential supply may outstrip demand, which could have a knock-on impact on other sectors,” he said.

Top 10 investors



United States



The Netherlands


United Arab Emirates





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