Iskandar Malaysia, Kulim High-Tech reshape Malaysia’s real estate landscape
30 Jan 2024
Kulim High-Tech’s strategic location and dedicated focus on high-tech industries attract major technology players
IN THE ever-evolving tapestry of Malaysia’s real estate market, two prominent players, Iskandar Malaysia and Kulim High-Tech Park Corp Sdn Bhd, emerge as beacons of innovation and transformation for Malaysia’s property sector.
Among the issues discussed at the PropertyGuru Malaysia Property Market Outlook 2024 Virtual Panel Discussion recently included the dynamic real estate landscape, centring on the pivotal roles these two high-tech hubs play in shaping the country’s economic and property development narrative.
Iskandar Malaysia: Catalyst for Growth
Iskandar Malaysia, positioned as a key economic development zone in the southern part of the country, stands out as a testament to Malaysia’s commitment to progress.
As a flagship economic corridor, it serves as a magnet for investors, developers and businesses seeking opportunities in a strategically positioned and well-connected region, particularly Johor being the neighbouring state for Singaporeans to enter Malaysia.
DataSense head of real estate intelligence Dr Lee Nai Jia predicts Johor to continue experiencing robust property demand from foreigners, particularly driven by a surge in interest from Singaporeans.
According to the PropertyGuru Malaysia Property Market Outlook Report 2024, Iskandar Puteri in Johor has witnessed the highest proportion of foreign demand, predominantly from Singaporeans.
The announcement of the Special Economic Zone and the ongoing development of the Johor Baru (JB)-Singapore Rapid Transit System (RTS) Link have been essential in amplifying interest from Singaporeans, Lee noted.
The soaring property prices in Singapore further contribute to the heightened demand in Johor, particularly for properties priced below RM1 million.
“We are seeing that (Singaporeans) are not looking at high-end homes priced above RM1 million which ties in well with them buying property in Malaysia.
“In terms of the Malaysia My Second Home (MM2H) impact, we suspect that potential buyers are still analysing and taking their time before deciding. We observe that Malaysians living in Singapore are also going back and looking at properties,” he said during the panel discussion.
This group, which frequently commutes between the two countries due to high rental costs in Singapore, represents the first wave of property buyers.
The second wave comprises potential buyers from Singapore, drawn in by the Malaysian government’s economic development initiatives, leading to increased interest and demand.
Meanwhile, Knight Frank Malaysia ED of research and consultancy Amy Wong said connectivity plays a pivotal role in attracting interest.
The development’s proximity to key transportation infrastructure positions it as a hub of economic activity and a hotspot for real estate growth.
Iskandar Malaysia’s allure extends beyond domestic borders, drawing attention from foreign investors, particularly Singaporeans.
National Property Information Centre (Napic) director Norhisham Shafie said the recent relaxation of the MM2H programme catalyses increased foreign investment, with Singaporean buyers exploring the real estate landscape Iskandar Malaysia offers.
“The relaxation was just recently announced so we cannot see a lot of impact on the transaction yet. But, of course, the three tiers will attract a lot of individual foreigners,” he said.
In December 2023, the government unveiled a revamped version of the MM2H programme which now has three tiers, namely Silver, Gold and Platinum.
Under the Platinum tier, participants must have a fixed deposit (FD) of RM5 million. After one year, a maximum withdrawal of 50% is allowed for property purchase (with a minimum value of RM1.5mil and above), healthcare and domestic travel within Malaysia.
The Gold tier sets the FD requirement at RM2 million with similar withdrawal provisions for property purchases (minimum value of RM750,000 and above), healthcare and domestic travel.
The Silver tier requires RM500,000 in FD with similar withdrawal provisions.
Meanwhile, Lee said the trend of Singaporeans exploring properties in Iskandar Malaysia might have already begun.
The connectivity enhancements, economic development announcements, and the MM2H programme create a perfect storm, positioning Iskandar Malaysia as an attractive destination for foreign buyers.
As the real estate market evolves, the concept of sustainable development takes centre stage.
Iskandar Malaysia, in its pursuit of innovation, incorporates green features and sustainable practices into its projects, aligning with global environmental consciousness.
Knight Frank’s Wong said the future of sustainable development in the real estate sector lies in a combination of innovative construction methods, technological advancements, and a shift in consumer preferences.
Her insights resonate with Iskandar Malaysia’s endeavours, reflecting a commitment to environmentally responsible construction and a vision that goes beyond traditional development paradigms.
Kulim High-Tech: Magnet for Tech Giants
While Iskandar Malaysia shapes the southern region, Kulim High-Tech emerges as a burgeoning tech powerhouse in the northern part of Malaysia.
With a focus on high-tech industries, Kulim High-Tech becomes a catalyst for economic growth, innovation and a unique real estate landscape.
Wong described Kulim as a very strong competitor for Penang, as it is a beneficiary of the spillover from the popularity of the latter as an electrical and electronic (E&E) hub.
Meanwhile, Lee said Kulim High-Tech’s strategic location and dedicated focus on high-tech industries attract major technology players. The developing neighbouring areas, such as Padang Serai, have witnessed the most significant growth at 59%, compared to other regions.
“Based on our data at DataSense, Padang Serai has the highest year-on-year (YoY) growth in terms of number of visitors, which is closely linked to the Kulim High-Tech Park,” he said.
The discussion highlighted the region’s potential to become a tech hub, drawing parallels with Silicon Valley and other global tech-centric zones.
Green Building Index’s (GBI) accreditation panel chairman Chan Seong Aun said transitioning towards industrialised buildings may entail higher initial costs for the first few projects. However, he emphasised that there could be a notable 20%-30% reduction in construction costs over time as the same systems are consistently employed.
His insights on industrialised building systems find resonance in Kulim High-Tech’s commitment to innovation besides saving costs.
As tech giants establish their presence, the demand for cutting-edge, sustainable real estate solutions is set to rise.
Like Iskandar Malaysia, Kulim High-Tech understands the importance of sustainable development.
As the tech industry prioritises environmental responsibility, Kulim High-Tech integrates green features into its real estate projects, providing a blueprint for sustainable urban development.
The panel also discussed preference and options among potential homeowners.
Lee said Malaysians, faced with higher homeownership costs, are willing to forgo certain amenities to make homes more affordable.
In response, developers may consider omitting amenities to reduce overall development costs and enhance affordability for consumers.
“According to our consumer sentiment service, buyers are thinking of giving up some key amenities. We also see that some of them are thinking of shifting to the rental market to accumulate savings,” he said.
Meanwhile, Chan said another factor that buyers need to consider is their safety against natural disasters such as floods and landslides while encouraging future homeowners to purchase green buildings, which have lower flood risks.
Source: The Malaysian Reserve