KUALA LUMPUR: The Johor-Singapore Special Economic Zone (JS-SEZ) agreement signed today is expected to transform the real estate markets in Malaysia and Singapore, said real estate technology group Juwai IQI.
In a statement, its co-founder and group chief executive officer (CEO), Kashif Ansari, said Johor is expected to gain more new foreign direct investment (FDI), manufacturing activity, tourism, and real estate activity.
The growth, he said, would have spillover effects for the rest of Malaysia, spreading the benefits more widely.
"In a positive scenario, Johor would experience more rapid economic growth, resulting in an estimated 50 to 90 basis points increase in the national gross domestic product (GDP) over the next decade.
"That means the JS-SEZ can add RM10.8 billion to RM19.8 billion to Malaysia's national economy within ten years," he said.
The International Monetary Fund (IMF) forecasted Malaysia's 2025 GDP at RM2.245 trillion (US$488.25 billion), based on the premise that massive FDI is mainly coming from China and the United States (US).
Regarding the real estate sector, Kashif said the JS-SEZ would begin to attract more businesses and individuals to Johor and witness greater activity and demand in the residential, office, industrial, and logistics real estate markets, as well as boost prices for developable land.
"When you have a near-seamless flow of goods, people, and businesses between Johor and Singapore, both economies will accelerate.
"Companies will not have to choose to locate in either Malaysia or Singapore because the JS-SEZ will give them the advantages of both countries plus additional incentives," he said.
Kashif said that Singapore would provide capital, technology, and expertise, while Malaysia would contribute a highly skilled workforce, renewable energy, land, and other resources.
He said that by reducing the cost of transport and taxes, the SEZ would allow firms to grow more quickly, hire more workers, and take risks they otherwise could not.
"One big-ticket infrastructure item is riding on the success of the new SEZ. If the SEZ is successful, it will give momentum to those who want to relaunch the high-speed rail project connecting Singapore and Malaysia," he added.
Separately, OCBC Bank (Malaysia) Bhd's CEO, Tan Chor Sen, opined that the JS-SEZ has the potential to be a magnet for international capital through the various initiatives announced.
He said the initiatives include the passport-free QR code clearance at Singapore's land checkpoints with Malaysia, the Invest Malaysia Facilitation Centre-Johor (IMFC-J), technical and vocational education and training (TVET)-related initiatives and streamlined customs procedures for land intermodal transhipments.
"We are particularly excited about the move to explore enhancing market access of financial institutions in both countries and the tax incentive packages for JS-SEZ," he said.