Iskandar set to reach tipping point

PETALING JAYA: Iskandar Malaysia is set to reach its tipping point in the next 24 months after the completion of key catalyst developments and infrastructure improvements, according to HwangDBS Vickers Research.

The research unit believed that prospects for the economic growth corridor in Johor would be boosted by the successful bilateral talks during the recent Malaysia-Singapore Leaders' Retreat, the entry of more property developers as well as spillover demand for properties in Iskandar due to Singapore's latest stamp duty hike and high property prices.

It was noted that the recent bilateral talks had resulted in fruitful discussions on topics such as the construction of an undersea tunnel linking Johor Baru and Singapore, sale of electricity to Singapore (possibly from Pengerang), co-operation in aviation and airport services between Johor's Senai International Airport and Singapore's Changi International Airport, and the formation of a work group on industrial co-operation to promote Iskandar and Singapore.

“The industrial co-operation work group may be a springboard for more investments by Singapore in Iskandar, and could be a key re-rating catalyst,” HwangDBS Vickers Research said.

Since 2006, Iskandar has received RM77.8bil worth of committed investments.

The region had also recently seen property launches setting new price benchmarks, the research house said.

“We were pleasantly surprised by the strong 65% bookings for UEM Land Holdings Bhd's Imperia@Puteri Harbour condominiums, which were launched in Nov 2011 at a record RM725 per sq ft.”

It was also noted that UEM Land's Impiana@East Ledang condominiums had seen brisk sales with two blocks almost fully sold within six months at RM480 per sq ft (compared with RM300 per sq ft for the adjacent Ujana apartments launched in 2009).

For SP Setia Bhd, Johor is also a core market (accounting for 29% of its sales) with sales surging 57% in its financial year ended Oct 31, 2011.

Meanwhile, land values in Johor's Southern Industrial and Logistics Clusters continued to appreciate with the latest transactions hitting RM35 per sq ft (compared with 2010's RM25 per sq ft).

HwangDBS Vickers Research said its top stock picks, for exposure to Iskandar, were UEM Land, SP Setia, Eastern & Oriental Bhd and Genting Plantations Bhd.

By The Star