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Johor property poised to draw spotlight
Iskandar Malaysia, new stamp duty on S'pore property deals drive interest
By: Pauline Ng
MORE costly private homes in Singapore - the result of new taxes - as well as perceivable improvements to Iskandar Malaysia, could turn the spotlight on Johor real estate next year.
Analysts expect the southern Malaysian state to benefit from the recent move by the Singapore government to make home ownership more within reach of a wider group, with UEM Land looking in good position to capitalise on the changes given its very sizeable landbank in Iskandar.
Last week, the Singapore government slapped foreign buyers with an additional 10 per cent tax on the value of residential properties acquired. Permanent residents buying second and subsequent homes and Singaporeans acquiring third or subsequent houses were also hit, albeit with an extra 3 per cent tax.
Around the same time, Malaysia's Genting group officially opened South-east Asia's first branded discount Premium Outlets in Kulai Jaya, north of Johor. Already, the Johor Premium Outlets (JPO) has attracted hordes of shoppers to its 70 stores - many apparently from Singapore - few leaving without bags. So encouraged are its owners, Genting Plantations and Premium Outlets, that they are already talking about the second phase of 60 additional stores and a water theme park in three to four years' time.
Local daily The Star reported that in total some RM1 billion (S$410.5 million) would be invested in the JPO project with other components in the pipeline to include a 2,000 room hotel with facilities for the lucrative meetings, incentives, conventions and exhibitions segment.
Although not within the special economic zone, JPO will certainly bring more locals, Singaporeans and other foreigners to Johor. This is set to benefit Iskandar Malaysia which five years to its launch is beginning to look more appealing in part also because a number of infrastructure projects have been completed.
If UEM Land's property sales this year are any indication, interest is mounting. The government linked company sold nearly RM1.8 billion worth of properties in the first nine months compared to RM948 million for the whole of last year.
In the third quarter, the flagship zone of Nusajaya contributed RM382 million compared to non-Nusajaya new sales of RM367 million.
In a client report, CIMB noted demand in Nusajaya appears to be gathering momentum as Q3's new sales topped 1H11's RM357 million. But UEM Land does not expect Nusajaya sales to exceed non-Nusajaya sales until 2013.
Landbanking is also on the rise, with the report noting a buyer's interest in 100 plus acres of Nusajaya land valued at over RM100 million. The sale is only expected to be concluded next year.
At the Putri Harbour area, UEM Land's maiden condo project of 246 units soft-launched in September is 61 per cent sold.
Prices averaged RM725 psf, 'a figure unheard of in Johor,' the stockbroker observed.
Four out of ten buyers were Malaysians, the rest from Singapore and Japan. Several purchased units because they plan to send their children to EduCity where Marlborough College and the medicine faculty of Newcastle University will be located.
UEM Land is apparently toying with the idea of bringing forward two condo projects but marketed under the Sunrise brand, having bought out the shareholders of the luxury condo developer last year.