Iskandar Development Region (IDR) @ South Peninsular Malaysia
by Elaine
12 Nov 2007

Introduction
IDR, known as Iskandar Development Region at South Peninsular Malaysia has been announced lately by the government of Malaysia as one of the key development of the country in the coming years.  It has key mixtures development that includes entertainment; environment and business seamlessly converge within a bustling and vibrant metropolis.

It includes 5 Economies zones Zone A) JB City Center with focus into Financial District and DangaBay as an integrated waterfront city; Zone B) Nusajaya that will becomes the new state administrative center with Universities, Medical centers, Resort and also logistic hub in the region.  Zone C) Western Gateway Development with a fast growing word class port – Tanjung Pelepas Port and Free Trade Zone status.  Zone D) Eastern Gateway Development which cover across Pasir Gudang industrial area, Pasir Gudang Port and also Southern Technology Park.  Zone E) Lastly, Senai – Skudai zone that where the state’s airport located with Technology hub, Multimedia hub, Knowledge hub and etc.

This review is more on preliminary as Iskandar Development Region is a master plan and will require time to be fully developed in many years ahead.  We will focus as normal in our review to access the impact of property investment and its return in this region in the coming years.

Location
IDR covers a land size of 2,217 sq KM within Johor State itself.  It is near to Singapore like Kuala Lumpur to Petaling Jaya.  For those who have been in JB City Center before will familiar with Zone A.  It is not just a single location but the 5 Zones in total is a master plan by the federal government and the state government to re-brand and look into detail of the best approach to develop Johor as it has a very strategic position near Singapore.  Joining the bandwagon will be Indonesia that recently also announced that a 20KM distance to Singapore – Pulau Batam as Free Trade Zone.

Combining IDR, Singapore and Pulau Batam, This is a regional zone that I think will create a competition to lure world class investment in the future. YTL Corporation has recently also keep updating about the potential of building a bullet train that connect between Kuala Lumpur to Singapore.  If this project comes through and it will pass by IDR and further create a super impact to the development in this area.  Further potential development like Disney Land to be built in IDR, I think that can be unthinkable in term of potential across from Kuala Lumpur to IDR to Singapore to Pulau Batam will be eye catching to the world.

In term of location, in here I categorize it as zone.  It will be no harm if you are going for a second or third property investment in IDR.  But, get close to a place that easy to rent out due to the development of IDR may still need at least 3-5 Years in order to start roaring.

Developer
A little different from the past when we evaluate the developers because they are private.  This time round, the developer of IDR is actually IDR authority.  They are the governance body that to ensure new projects by developers and investors fall into the plan and provide whatever assistance possible.

Thus, until we can evaluate further into a single project by the developers, then we will be able to provide more information.  Anyhow, IDR Authority will not be built half way and go away.  It is a national project and I am pretty sure it will be a stable.

Special
In term of advantages of IDR, there are many and it will be easy to find out from their website www.idr.com.my  But to us, IDR stands a very great chance of being regional zone together with Singapore and Indonesia.  This potential is immense and given if you have enough time to wait for 5 – 10 Years; buying commercial land within the zone should have handsome returns.  Otherwise, shop around at JB City Center and compare to pre-crisis level, the prices of the residential properties may not fully recover and still have good value property around.  Again, yes, it is a regional play and not within Malaysia alone

Against
Two major challenges that come to our mind will be 1st Execution of the plan and 2nd Security of the area.  The importance of the project will be very much depending on the execution of the authority.  To a certain extend, I believe it needs to be fast, accurate and responsible.  It will be not hard to remember Cyberjaya MSC zone and Putrajaya from the past few years.  There is a feel of halt temporarily due to the change hand to new leadership and also a policy switch to create multiple MSC zones in the country.  The authority must be persistent in term of these developments because it will impact the national economy in the country.  We welcome the new governmental policies but we hope to focus in developing what has been planned and all out for it.

Second challenge will be the security issue at South Johor City Center as the increasing crime rate reported by the media is worrying.  May be in the past we do have a lot of criminal cases but was not reported like today.  Due to the media era is coming, it will be easily known to the world and this will somehow impact the development progress of this IDR concept.

Conclusion
Given the regional strategic location, a trustable developer (the authority), government incentives and again Malaysia as a beautiful and resourceful country, I believe this project will be a success if execution is going well.  Well done Malaysia’s government for this branding exercise – Iskandar Development Region of South Peninsular Malaysia.