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Looming residential supply prompts Medini Iskandar to stop selling land for now

Wednesday, March 18, 2015 - 10:05
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Medini Iskandar Malaysia Sdn Bhd (MIMSB) managing director and CEO Khairil Anwar Ahmad (left) said on Tuesday that the Board has decided to stop selling land and develop the commercial plots first, which make up half of the 55 unsold plots.

LOOMING residential supply at Iskandar Malaysia has prompted the master-planner for Medini - the designated Central Business District of Nusajaya - to take stock of its plan for the remaining land bank.

Medini Iskandar Malaysia Sdn Bhd (MIMSB) managing director and CEO Khairil Anwar Ahmad said on Tuesday that the Board has decided to stop selling land and develop the commercial plots first, which make up half of the 55 unsold plots.

"The last thing we want to do is to cannibalise the market. Most of the developers who have bought land in Medini are developing residential properties so that's the last thing we want to do,"Mr Khairil told the Singapore media in Nusajaya. "We would rather work with them to make them successful because their success is Medini's success."

MIMSB is 60 per cent owned by Iskandar Investment Berhad, with the remaining 40 per cent equally held by Dubai's United World Infrastucture and Japan's Mitsui & Co Ltd.

It completed the development of Medini 6 in 2013 with a total gross floor area (GFA) of 80,000 sq ft of office space. Its second office project Medini 7, with a larger GFA of about 144,000 sq ft is slated to complete this year. The master developer of Medini is now developing two other high-rise office buildings now in view of the demand for quality office space in Medini.

Iskandar Regional Development Authority (IRDA), the statutory authority for regulating and driving the development of Iskandar Malaysia, played down fears of an impending property glut.

Khaidzir A Rasip, senior vice-president for strategic communications at IRDA, pointed out that the influx of mega projects by Chinese developers in Iskandar was least expected. "Of course, we do expect the developers to do their own research to ensure that whatever they supply will match the demand," he said.

But he noted that a property supply overhang is unlikely to happen now given the conscientious efforts by the government to drive economic activity in Iskandar Malaysia, whose development remains on track.

"We have to work even harder to bring in the investments to ensure that economic activities actually happen. With that, then we can increase the population and create the demand for the properties," he said.

Iskandar Malaysia has already exceeded its target of achieving RM73 billion (S$27 billion) of investments during its second development phase from 2011 to 2015, having achieved some RM88.7 billion of investments over this five-year period to hit RM158.1 billion as of end-2014.

Having focused previously on sectors like education and healthcare, IRDA is shifting its attention to developing sectors like tourism and creativity industries.

Mr Khaidzir said IRDA is still aiming to reach RM383 billion in cumulative committed investments by 2025.