KUALA LUMPUR: The Johor-Singapore Special Economic Zone (JSSEZ) and the surge in data centre developments will remain key areas of focus for the real estate sector in the second half of 2024 (2H 2024).
According to Maybank Investment Bank (Maybank IB), the JSSEZ will drive demand for residential, commercial, and industrial properties, with the growing population requiring more housing.
It noted that the JSSEZ is expected to encompass the entire Iskandar Malaysia (IM) rather than being limited to a single area within the region. This area is likely to include Johor Bahru, Iskandar Puteri, Pasir Gudang, Kulai (including Sedenak), Pengerang, and Pontian.
While covering a larger area may dilute the positive impact on individual developers, it will promote more balanced growth across the various regions of IM, the investment bank said.
The JSSEZ agreement is anticipated to be signed in September, with investment and tax incentives to be announced during Budget 2025.
"In our view, the biggest beneficiaries of JSSEZ are the unlisted government-owned developers and listed plantation groups like Johor Land Berhad (Jland) and Iskandar Investment Bhd (IIB)," the investment bank said.
JLand is the property arm of Johor Corporation, which in turn is a Johor state principal development institution. Its flagship project includes the 7,290-acre Ibrahim Technopolis (IBTEC) in Sedenak.
The later stage of IBTEC will include residential and commercial properties, in addition to industrial properties. JLand's other projects include the 180-acre Arena Larkin urban regeneration project.
IIB, owned by Khazanah Nasional Bhd, the Employees Provident Fund and Kumpulan Prasarana Rakyat Johor, has 5,000 to 6,000 acres of land in Iskandar Puter.
Maybank IB said that from a previous meeting with IIB, it understands that the company is looking to launch its maiden residential project, namely WAWARI, comprising 248 units of townhouses, commercial hubs, and apartments in Iskandar Puteri by 4Q 2024.
"In the past, IIB and Johor Corporation (via Jland) mostly focused on land sales. However, we expect them to be more involved in property development going forward (instead of outright land sale) amid an improved outlook for Johor's property market due to the JSSEZ, the Johor-Singapore Rapid Transit (RTS) and Autonomous Rapid Transit (ART) system," it said.
The investment Bank said that listed plantation groups with sizeable landbanks in IM like SD Guthrie (SDG), KL Kepong (KLK), Johor Plantations, and Genting Plantations (GenP) would also benefit from the JSSEZ due to demand for development land by developers or data centre players. SDG, KLK, Johor Plantations, and GenP are the top four largest landowners in Kulai district.
SDG has recently made known its intention to develop green industrial parks, supported by large-scale solar, on its own or with JV partner(s).
"Nonetheless, we believe SDG is also not adverse to monetising some of its landbank in Kulai to other township developers at the right price," it said.
Meanwhile, Maybank IB said that the booming property market in Johor, especially for industrial properties, may pose a challenge to smaller specialist developers like AME Elite to expand on their landbank at a cheaper cost.
"The addition of new property developers in the industrial property segment also makes it challenging for AME to secure primely located land and attract potential buyers/tenants," it said.