LOOMING residential supply in 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 landbank.
Medini Iskandar Malaysia Sdn Bhd (MIMSB) managing director and chief executive Khairil Anwar Ahmad said on Tuesday that the board has decided to stop selling land and to instead develop the commercial plots, which make up about half the area of Medini's 55 unsold plots.
The unsold plots have a total estimated gross floor area (GFA) of 41 million sq ft; the commercial plots span 26 million sq ft.
MIMSB is in ongoing discussions with developers, both local and foreign, to develop the commercial plots. It will also launch a rebranding campaign for Medini this year.
Mr Khairil said during a presentation to Singapore reporters in Nusajaya: "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.
"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; the remaining 40 per cent is equally held by Dubai's United World Infrastructure and Japan's Mitsui & Co Ltd.
Its first office building, Medini 6, was completed in 2013. Its net lettable office space of 50,675 sq ft is fully tenanted with Huawei and Goldbury Communications among its key tenants.
Its second office project, Medini 7, will have a net lettable area of 106,333 sq ft and is expected to be completed soon.
MIMSB is now developing two other high-rise office buildings in view of the demand for quality office space. One of them, Medini 9, to have a net lettable area of 372,000 sq ft, will commence construction in May. It is scheduled to be completed in 2018.
Pointing to three recent launches by different developers in the past six months, Mr Khairil said all three developers were happy with the response they got, though they realised they had to be careful with the timing of the launches and the pricing.
"People understand that Nusajaya has its own identity, its own value proposition and I hope that, once we can finalise some of our public-transport initiatives - for instance, once we finalise the location of the high-speed rail station in Nusajaya - this will only add further value to Nusajaya's proposition," he said.
Iskandar - three times the size of Singapore - was launched as a special economic zone in Johor Bahru in 2006, but took off only in 2012, after several catalytic projects in Nusajaya were completed. These included:
- EduCity, an International education hub;
- Pinewood Iskandar Malaysia Studios, with over 100,000 sq ft of film stages;
- Puteri Harbour, a waterfront development;
- Horizon Hills, a luxury golf resort; and
- Asia's first Legoland theme park.
Iskandar exceeded its target of achieving RM73 billion in investments during its second development phase from 2011 to 2015, based on figures from Iskandar Regional Development Authority (IRDA), the statutory authority for regulating and driving the development of Iskandar Malaysia.
Some RM88.7 billion of committed investments poured in during those five years, bringing the total cumulative investments committed to RM158.1 billion as at the end of last year. Singapore companies accounted for 8 per cent of the total committed investments.
So far, nearly half of those total committed investments have been realised, said Khaidzir A Raspi, IRDA senior vice-president for strategic communications told reporters on Tuesday. Property investments accounted for 52.3 per cent of the total investment commitments, followed by manufacturing at 36.5 per cent.
Having focused mainly on sectors like education and health care, IRDA is now turning its attention to developing sectors such as tourism and creative industries, he said. IRDA's goal is to reach RM383 billion in cumulative committed investments by 2025.
IRDA has been trying to attract small and medium-sized enterprises (SMEs) from the rest of Malaysia and Singapore to set up their offices or factories in Iskandar; the upcoming industrial parks managed by established developers will be a major selling point for Singapore companies.
Mr Khaidzir said that while the influx of mega projects by gungho Chinese developers in Iskandar was least expected, a property supply overhang was unlikely, given the efforts by the government to drive economic activity in Iskandar.
"We have to work even harder to bring in the investments to ensure that economic activities actually happen. With that, we can increase the population and create the demand for the properties," he said.
The Malaysian government has committed RM7.3 billion in Iskandar to build infrastructure and upgrade existing amenities. The ratio of private sector to public sector investment grew from 1:1 in 2006 to 13:1 in 2012.
In Nusajaya's Medini, master developer MIMSB intends to deploy and roll out Smart Integrated Township Management services, including information and communications technology (ICT) services and facility-management services, as part of its efforts in sustainable development.