Defining moment for Iskandar Malaysia
Your window to Malaysia
Saturday, 23 March 2013
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by Leu Siew Ying of The Edge Singapore on Thursday, 21 March 2013 08:00
The fortunes of southern Johor have ebbed and flowed with the shifting economic relationship between Singapore and Malaysia. Now, amid grand initiatives that are drawing the two countries closer together, the southern tip of Peninsular Malaysia is experiencing an investment boom.
Choo Yeow Ming, a lawyer-turned-businessman, fondly remembers growing up in Johor Baru during the 1960s. He frequently followed his parents for late-night suppers at hawker stalls in the town. And, they would often take him to the Cathay cinema, a stone's throw from the Causeway. "My mother loved Cantonese opera," he says. "The shows finished at about 11pm, and we'd walk home. It was a good 20 minutes."
Things began to change quickly in the 1970s, though. Singapore turned itself into an attractive destination for foreign investment and quickly developed its manufacturing, transportation and financial services sectors. The Singapore dollar, which traded at a par with the Malaysian ringgit until 1973, began to appreciate steadily. Wages in Singapore, which were always a little higher than in JB, began rising faster too.
The cheaper cost of living in JB made the town a natural place for Malaysians working in Singapore to live. In fact, by the 1980s, JB had morphed into a dormitory town of sorts, housing workers from all over Malaysia who commuted daily to Singapore's factories, shops and hotels on buses and motorcycles. Meanwhile, many Singaporeans began travelling to JB on weekends for cheap shopping, restaurant meals and nightclub entertainment.
However, that created an insalubrious environment and drove up the crime rate. "It became a sleazy town. The boom in karaoke bars brought undesirable elements," Choo says. "The crime rate was so high that Singaporeans dared not go there."
Choo knew well what Singaporeans thought of JB because he had gone to study in a Singapore school in 1971 on a scholarship. He later attended university in the US, and worked there as a lawyer for several years. He then moved to Hong Kong, initially to expand the law practice with which he was associated, but later got into a range of businesses himself.
By 2004, he was hankering for a slower pace of life and decided to move closer to home. But instead of returning to JB, he relocated to Singapore, where he now lives in a Good Class Bungalow in an exclusive neighbourhood. Among Choo's current business interests is a controlling stake in Singapore Exchange-listed Asia-Pacific Strategic Investments, a provider of bereavement services that is now in the process of restructuring itself into a power generation company.
Since moving to Singapore, Choo has watched with amazement the changes taking place in his hometown across the Causeway. "For some time now, I can see that JB has transformed," he says. Six years ago, the Iskandar Malaysia development region was launched, with the aim of unlocking the economic potential of southern Johor, by leveraging its abundant supply of land, relatively inexpensive labour and proximity to Singapore.
Already, a number of universities have opened in Iskandar Malaysia, and a top-notch British school is attracting the children of well-heeled parents in Singapore. Theme parks and a discounted brands outlet have opened. Hospitals have sprung up and residential properties are selling like hot cakes. This year, movie production facilities affiliated to the UK's Pinewood Studios are scheduled to open. A new immigration checkpoint is also scheduled to open at Puteri Harbour in the next few months to service water taxis plying the Johor Straits.
Meanwhile, an oil-and-gas hub is taking shape with Malaysia's Petroliam Nasional investing RM60 billion ($24 billion) in a refinery and petrochemical complex; and Bursa Malaysia-listed Dialog group, Royal Vopak of the Netherlands and the Johor state government building a RM5 billion deepwater oil terminal.
Last week, the Iskandar Malaysia initiative got a significant boost with the launch of two "wellness" projects by Malaysia's Prime Minister Najib Razak and Singapore's Prime Minister Lee Hsien Loong. The projects, with a combined value of RM5.2 billion, are jointly owned by Temasek Holdings and Khazanah Nasional, through Pulau Indah Ventures, a vehicle in which they have equal stakes.
The "wellness" projects, which are essentially property developments that incorporate spas, a corporate training facility and retail outlets, came about following a deal in which Malaysia exchanged its railway land in Singapore for development land in Marina South and the Ophir-Rochor area. As part of that land swap, the two governments also undertook to cooperate in the development of Iskandar Malaysia.
Other projects that were announced during the meeting between the two prime ministers included plans for a high-speed rail link between Singapore and Kuala Lumpur; a feasibility study into a third road link between the two countries; a new ferry service that will run between Iskandar Malaysia's Puteri Harbour and Singapore; and a $3.2 billion property development project in Danga Bay led by CapitaLand, Temasek Holdings and Iskandar Waterfront.
Now, JB is emerging as more than just a dormitory town to support Singapore's booming industries. Instead, together with the whole Iskandar Malaysia region, it could become more closely integrated with Singapore's economy and provide an alternative lifestyle for residents of space-constrained Singapore. In the process, property prices in Iskandar Malaysia, which have already soared, could continue climbing higher.
Choo likens the relationship between Iskandar Malaysia and Singapore to that between Shenzhen and Hong Kong. "Shenzhen was a fishing village. It also had a high crime rate because of all the factors I mentioned," Choo says. "Now, it is a well-run city and one of the most expensive in China in terms of property prices. Once wealth comes in, people start to protect the environment and things improve. It is now easier to find jobs, so there is less crime."
If the same thing happens in Iskandar Malaysia, it could become a more acceptable place for residents of Singapore to live, Choo continues. In fact, his niece and her husband, who both work in Singapore, have chosen to live across the Causeway and commute every day. "I have no reason to go and live there," says Choo, 59, alluding to the wealth he has already accumulated. "My niece and her husband are young. If they were to buy something here, they would be incurring debt instead of happily raising kids."
Is Iskandar Malaysia resetting the symbiotic relationship between southern Johor and Singapore? What new synergies can JB and Singapore unlock from their close proximity? Have property prices in Iskandar Malaysia run up too much? What is the risk of the whole Iskandar Malaysia initiative losing momentum?
Stretching from the eastern to the western coast of the southern tip of Peninsular Malaysia and as far north as the town of Kulai, Iskandar Malaysia spans some 2,200 sq km, or about three times the size of Singapore. To date, the federal government has spent more than RM7.3 billion to build infrastructure in Iskandar Malaysia, including highways and utilities. And, committed investment in the region as at end-2012 stood at RM106.3 billion, more than the target of RM100 billion that the Malaysian government had set.
Ismail Ibrahim, CEO of Iskandar Regional Development Authority (IRDA), a statutory body set up to organise and promote the growth of Iskandar Malaysia, says part of the reason for the strong investment figures is the boom in property development, which was actually not a sector that was being promoted. Of the total investment funds attracted, the manufacturing sector accounted for some 29%, while the property sector followed closely behind, accounting for 25.6%. The utilities sector was in a distant third place, accounting for 6%.
Has there been overinvestment in property in Iskandar Malaysia? Ismail points out that the raw investment figures don't accurately reflect the future economic activity or population growth that is likely to take place in the area. While manufacturing projects tend to be capital-intensive, service industries usually don't require much upfront investment. Yet, it is service-oriented businesses that tend to have a greater multiplier effect on the domestic economy.
In education, for instance, Iskandar Malaysia has attracted 12 institutions, which include those that are public-, private-, foreign- and local-owned. Some of the education facilities that have opened are Marlborough College's first international branch, University of Newcastle's medical faculty and University of Southampton's engineering faculty. More than 100 children are crossing the Second Link every day to go to school in Marlborough College, which is a switch from the legions of Malaysian students who have traditionally crossed the Causeway to their schools in Singapore.
"We anticipate that by 2015, the student population in Iskandar Malaysia will grow to 80,000," says Ismail. Some of these students, it is envisaged, will form part of the pool of talent required to support the services sector in Iskandar Malaysia. These would include people with the technical skills as well as creative talent to support Pinewood Iskandar Malaysia Studios.
Lim Boon Ping, who grew up in Ulu Tiram, a town located 18km to the northeast of JB, and now runs his family's real-estate business, Tiram Realty, says the growth in the number of people coming to Iskandar Malaysia for business is adding to the services boom. "Previously, people were not keen to invest in hotels. Now, I have many clients who want to build hotels," he notes. Moreover, MNCs operating out of the greater Kuala Lumpur area now want to set up a base in Iskandar Malaysia, he adds.
Lim of Tiram Realty says property prices in Iskandar Malaysia have certainly risen sharply. Yet, he believes the elevated prices are sustainable because the profile of the buyers has changed. While a 1,000 sq ft property priced at RM1,000 psf is equivalent to 27 years of an average Malaysian salary, it is only 10 years of an average Singaporean salary. Moreover, the buyers who are getting into the market now are quite prepared to hold the properties for the long term, he claims. "Now, it's a much healthier market. It's more solid. People are buying for investment purposes. In the past, they bought to flip."
Lim also points out that top-end residential property prices in Iskandar Malaysia are still well below those of similar developments in Kuala Lumpur. So far, the most expensive development in Iskandar Malaysia is a condominium project called Lido Boulevard, which is expected to be priced at about $1,000 psf. By comparison, Pavilion Private Residences, one of Kuala Lumpur's latest upmarket condo development, is selling at RM2,000 psf. Lim isn't betting that prices in Iskandar Malaysia will exceed prices in Kuala Lumpur anytime soon, though, because it doesn't yet have the population to support it. Instead, he sees prices in Iskandar Malaysia hovering at a 30% to 40% discount to prices in KL.
So, who are the buyers from Singapore supporting the property market in southern Johor? Are they really prepared to hold their investments for the long term?
Changing investor profile
Michelle Laight, who is from the Philippines, and her British husband Tom, decided to move to Johor two years ago, after more than 20 years in Singapore. The reason was simply that they had grown weary of the overcrowdedness of Singapore and longed for more space. "In the 1990s, there were not as many buildings in Singapore," says Michelle. "Now, you open your eyes and it is stressful — all these highrises."
As it happened, the move opened the door to opportunities the Laights hadn't expected. The couple, who are in their 60s and 70s, bought a house in an area known as Plentong, just outside Johor Baru. They commute daily to Orchard Road, where they still run their human resources company.
Last year, the cheap rents on commercial property in Johor prompted the Laights to open a restaurant called Uncle Tom's Tavern near their new home. The new business has since stabilised and has added a rewarding new dimension to their lives. Now, the Laights leave home for Singapore at 8.30am, and head back to Plentong by 3.30pm. That enables them to reach their restaurant in time for the dinner crowd.
Life in Plentong hasn't been entirely pleasant, though. Since moving there, they have been the victims of a burglary and suffered a nasty road accident. But neither of them regrets the decision to move to Johor. "Here, there is fresh air. You can smell the grass when you wake up," says Michelle. The pace of life is slower and they have found it easier to make friends. "In Singapore, you can't just sit and talk. I always have my pen and paper and calculator. It's always about money," says Michelle.
Eric Wong, a semi-retired Singaporean, decided to take the plunge with a property in Iskandar Malaysia because it didn't cost much money. He bought a double-storey, semi-detached house in Bukit Indah as an investment for RM928,000 after learning about it from a brochure dropped in his letter box. "As soon as I saw it, I was interested," says Wong. "I went to S P Setia's sales office in VivoCity and immediately booked a unit. It's a fully gated community, so I think it's safe there."
Wong isn't renting out the house, though. Instead, he goes to his house in Bukit Indah in the morning after dropping his wife off at work and returns at mid-day to pick her up for lunch. According to him, he spends his mornings at the house, trading stocks and watering his lawn. He has spent only one night there since he bought the house three years ago. "I bought the place for future use. If I don't want it, I can sell it," he says.
Isn't it expensive to maintain a home that you don't actually use all the time? "Property tax is only RM55 a month, quit rent is RM10, security and maintenance is RM120, electricity is RM40, water is RM20, telephone is RM22 and Internet is RM50. I pay $140 in total to maintain the house," he says, showing The Edge Singapore his expense bill.
The way Wong sees it, the cost of the home and the monthly bills are a small price to pay for the enjoyment and future options it gives him. "My place is beautiful. The compound is big. There is nobody to disturb you," he boasts. "What more do you want for $300,000?"
A New Jersey or Petaling Jaya?
Where does Iskandar Malaysia go from here? Will it become more closely integrated with Singapore? And, will that keep property prices up? Agatino Rizzo, an assistant professor of urban planning at Qatar University, who led a research project and summer school on the Singapore-Johor Mega City Region from 2009 to 2010 at Universiti Teknologi Malaysia, says Johor is challenged by its lack of an educated and highly skilled workforce. As long as the knowledge gap between Singapore and Johor remains wide, Johor will not strategically benefit from rising costs in Singapore, Rizzo tells The Edge Singapore.
However, it is proving to be an attractive place for Singapore's working professionals and business people to live. Rizzo says there are already some 30,000 Malaysian workers who commute to work in Singapore every day. "So, I think that, given the cheaper price for high-end properties in Iskandar, if the Tuas Link will continue to provide efficient and rapid custom clearance, more and more Malaysian workers (professionals, educated and skilled labour) will choose to live in Iskandar," he says.
For Singaporeans to relocate to Iskandar Malaysia en masse, however, more conditions need to be met. Among other things, there would have to be lots of good English-curriculum schools as well as affordable facilities for leisure activities such as golf and sailing. It would also be imperative that there is a fast and reliable means of commuting to and from Singapore.
Is Iskandar Malaysia to Singapore what Shenzhen is to Hong Kong? Could it one day be to Singapore what New Jersey and Connecticut are to Manhattan? Or, closer to home, could it be to Singapore what Petaling Jaya is to Kuala Lumpur?
The obvious difference is that Malaysia and Singapore are separate countries. "Thus [the] Singapore-JB case is much more complex than [the] others, because besides financial and infrastructure challenges, we have more important political differences that are tied to history, post-colonial heritage and nation-building," says Rizzo.
Yet, there are examples of conurbations that transcend national borders. Denmark's capital city of Copenhagen is linked by a bridge to the Swedish city of Malmo, much as Singapore is linked to JB by the Causeway. Like Singapore and Malaysia, which were under British colonial rule, Denmark and Sweden, during the Middle Ages, were a single country, notes Rizzo. Copenhagen was the key centre of the empire at the time, while Singapore was a key centre of the Straits Settlements during the colonial era, he adds.
"However, [Copenhagen and Malmo] are contained within the European Union supranational organisation that is a much politically stronger union than Asean is. This united political platform [of the EU] provides for a common transport policy and sharing of benefits," Rizzo says.
The big question now is whether warming relations between Malaysia and Singapore forge closer cooperation and a stronger shared interest in Iskandar Malaysia. And, even if that happens, it remains to be seen how quickly that translates into an influx of business and people into the area.
Choo figures that the strong investor interest in his hometown is creating an exciting opportunity for property developers. And, he might get into the game himself. "I'm thinking of developing offices and link shophouses there," he says. But he's less certain if he would be prepared to invest in properties for yield and capital appreciation at this point. "Property prices are not cheap," he says. "Investment is not a good idea because there is too much supply."
For many Singaporeans, however, the steep discount in property prices across the Causeway versus the local market is too good an opportunity to pass up.
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Your window to Malaysia
Saturday, 23 March 2013
Font-size: A | A | A
by Leu Siew Ying of The Edge Singapore on Thursday, 21 March 2013 08:00
The fortunes of southern Johor have ebbed and flowed with the shifting economic relationship between Singapore and Malaysia. Now, amid grand initiatives that are drawing the two countries closer together, the southern tip of Peninsular Malaysia is experiencing an investment boom.
Choo Yeow Ming, a lawyer-turned-businessman, fondly remembers growing up in Johor Baru during the 1960s. He frequently followed his parents for late-night suppers at hawker stalls in the town. And, they would often take him to the Cathay cinema, a stone's throw from the Causeway. "My mother loved Cantonese opera," he says. "The shows finished at about 11pm, and we'd walk home. It was a good 20 minutes."
Things began to change quickly in the 1970s, though. Singapore turned itself into an attractive destination for foreign investment and quickly developed its manufacturing, transportation and financial services sectors. The Singapore dollar, which traded at a par with the Malaysian ringgit until 1973, began to appreciate steadily. Wages in Singapore, which were always a little higher than in JB, began rising faster too.
The cheaper cost of living in JB made the town a natural place for Malaysians working in Singapore to live. In fact, by the 1980s, JB had morphed into a dormitory town of sorts, housing workers from all over Malaysia who commuted daily to Singapore's factories, shops and hotels on buses and motorcycles. Meanwhile, many Singaporeans began travelling to JB on weekends for cheap shopping, restaurant meals and nightclub entertainment.
However, that created an insalubrious environment and drove up the crime rate. "It became a sleazy town. The boom in karaoke bars brought undesirable elements," Choo says. "The crime rate was so high that Singaporeans dared not go there."
Choo knew well what Singaporeans thought of JB because he had gone to study in a Singapore school in 1971 on a scholarship. He later attended university in the US, and worked there as a lawyer for several years. He then moved to Hong Kong, initially to expand the law practice with which he was associated, but later got into a range of businesses himself.
By 2004, he was hankering for a slower pace of life and decided to move closer to home. But instead of returning to JB, he relocated to Singapore, where he now lives in a Good Class Bungalow in an exclusive neighbourhood. Among Choo's current business interests is a controlling stake in Singapore Exchange-listed Asia-Pacific Strategic Investments, a provider of bereavement services that is now in the process of restructuring itself into a power generation company.
Since moving to Singapore, Choo has watched with amazement the changes taking place in his hometown across the Causeway. "For some time now, I can see that JB has transformed," he says. Six years ago, the Iskandar Malaysia development region was launched, with the aim of unlocking the economic potential of southern Johor, by leveraging its abundant supply of land, relatively inexpensive labour and proximity to Singapore.
Already, a number of universities have opened in Iskandar Malaysia, and a top-notch British school is attracting the children of well-heeled parents in Singapore. Theme parks and a discounted brands outlet have opened. Hospitals have sprung up and residential properties are selling like hot cakes. This year, movie production facilities affiliated to the UK's Pinewood Studios are scheduled to open. A new immigration checkpoint is also scheduled to open at Puteri Harbour in the next few months to service water taxis plying the Johor Straits.
Meanwhile, an oil-and-gas hub is taking shape with Malaysia's Petroliam Nasional investing RM60 billion ($24 billion) in a refinery and petrochemical complex; and Bursa Malaysia-listed Dialog group, Royal Vopak of the Netherlands and the Johor state government building a RM5 billion deepwater oil terminal.
Last week, the Iskandar Malaysia initiative got a significant boost with the launch of two "wellness" projects by Malaysia's Prime Minister Najib Razak and Singapore's Prime Minister Lee Hsien Loong. The projects, with a combined value of RM5.2 billion, are jointly owned by Temasek Holdings and Khazanah Nasional, through Pulau Indah Ventures, a vehicle in which they have equal stakes.
The "wellness" projects, which are essentially property developments that incorporate spas, a corporate training facility and retail outlets, came about following a deal in which Malaysia exchanged its railway land in Singapore for development land in Marina South and the Ophir-Rochor area. As part of that land swap, the two governments also undertook to cooperate in the development of Iskandar Malaysia.
Other projects that were announced during the meeting between the two prime ministers included plans for a high-speed rail link between Singapore and Kuala Lumpur; a feasibility study into a third road link between the two countries; a new ferry service that will run between Iskandar Malaysia's Puteri Harbour and Singapore; and a $3.2 billion property development project in Danga Bay led by CapitaLand, Temasek Holdings and Iskandar Waterfront.
Now, JB is emerging as more than just a dormitory town to support Singapore's booming industries. Instead, together with the whole Iskandar Malaysia region, it could become more closely integrated with Singapore's economy and provide an alternative lifestyle for residents of space-constrained Singapore. In the process, property prices in Iskandar Malaysia, which have already soared, could continue climbing higher.
Choo likens the relationship between Iskandar Malaysia and Singapore to that between Shenzhen and Hong Kong. "Shenzhen was a fishing village. It also had a high crime rate because of all the factors I mentioned," Choo says. "Now, it is a well-run city and one of the most expensive in China in terms of property prices. Once wealth comes in, people start to protect the environment and things improve. It is now easier to find jobs, so there is less crime."
If the same thing happens in Iskandar Malaysia, it could become a more acceptable place for residents of Singapore to live, Choo continues. In fact, his niece and her husband, who both work in Singapore, have chosen to live across the Causeway and commute every day. "I have no reason to go and live there," says Choo, 59, alluding to the wealth he has already accumulated. "My niece and her husband are young. If they were to buy something here, they would be incurring debt instead of happily raising kids."
Is Iskandar Malaysia resetting the symbiotic relationship between southern Johor and Singapore? What new synergies can JB and Singapore unlock from their close proximity? Have property prices in Iskandar Malaysia run up too much? What is the risk of the whole Iskandar Malaysia initiative losing momentum?
Stretching from the eastern to the western coast of the southern tip of Peninsular Malaysia and as far north as the town of Kulai, Iskandar Malaysia spans some 2,200 sq km, or about three times the size of Singapore. To date, the federal government has spent more than RM7.3 billion to build infrastructure in Iskandar Malaysia, including highways and utilities. And, committed investment in the region as at end-2012 stood at RM106.3 billion, more than the target of RM100 billion that the Malaysian government had set.
Ismail Ibrahim, CEO of Iskandar Regional Development Authority (IRDA), a statutory body set up to organise and promote the growth of Iskandar Malaysia, says part of the reason for the strong investment figures is the boom in property development, which was actually not a sector that was being promoted. Of the total investment funds attracted, the manufacturing sector accounted for some 29%, while the property sector followed closely behind, accounting for 25.6%. The utilities sector was in a distant third place, accounting for 6%.
Has there been overinvestment in property in Iskandar Malaysia? Ismail points out that the raw investment figures don't accurately reflect the future economic activity or population growth that is likely to take place in the area. While manufacturing projects tend to be capital-intensive, service industries usually don't require much upfront investment. Yet, it is service-oriented businesses that tend to have a greater multiplier effect on the domestic economy.
In education, for instance, Iskandar Malaysia has attracted 12 institutions, which include those that are public-, private-, foreign- and local-owned. Some of the education facilities that have opened are Marlborough College's first international branch, University of Newcastle's medical faculty and University of Southampton's engineering faculty. More than 100 children are crossing the Second Link every day to go to school in Marlborough College, which is a switch from the legions of Malaysian students who have traditionally crossed the Causeway to their schools in Singapore.
"We anticipate that by 2015, the student population in Iskandar Malaysia will grow to 80,000," says Ismail. Some of these students, it is envisaged, will form part of the pool of talent required to support the services sector in Iskandar Malaysia. These would include people with the technical skills as well as creative talent to support Pinewood Iskandar Malaysia Studios.
Lim Boon Ping, who grew up in Ulu Tiram, a town located 18km to the northeast of JB, and now runs his family's real-estate business, Tiram Realty, says the growth in the number of people coming to Iskandar Malaysia for business is adding to the services boom. "Previously, people were not keen to invest in hotels. Now, I have many clients who want to build hotels," he notes. Moreover, MNCs operating out of the greater Kuala Lumpur area now want to set up a base in Iskandar Malaysia, he adds.
Lim of Tiram Realty says property prices in Iskandar Malaysia have certainly risen sharply. Yet, he believes the elevated prices are sustainable because the profile of the buyers has changed. While a 1,000 sq ft property priced at RM1,000 psf is equivalent to 27 years of an average Malaysian salary, it is only 10 years of an average Singaporean salary. Moreover, the buyers who are getting into the market now are quite prepared to hold the properties for the long term, he claims. "Now, it's a much healthier market. It's more solid. People are buying for investment purposes. In the past, they bought to flip."
Lim also points out that top-end residential property prices in Iskandar Malaysia are still well below those of similar developments in Kuala Lumpur. So far, the most expensive development in Iskandar Malaysia is a condominium project called Lido Boulevard, which is expected to be priced at about $1,000 psf. By comparison, Pavilion Private Residences, one of Kuala Lumpur's latest upmarket condo development, is selling at RM2,000 psf. Lim isn't betting that prices in Iskandar Malaysia will exceed prices in Kuala Lumpur anytime soon, though, because it doesn't yet have the population to support it. Instead, he sees prices in Iskandar Malaysia hovering at a 30% to 40% discount to prices in KL.
So, who are the buyers from Singapore supporting the property market in southern Johor? Are they really prepared to hold their investments for the long term?
Changing investor profile
Michelle Laight, who is from the Philippines, and her British husband Tom, decided to move to Johor two years ago, after more than 20 years in Singapore. The reason was simply that they had grown weary of the overcrowdedness of Singapore and longed for more space. "In the 1990s, there were not as many buildings in Singapore," says Michelle. "Now, you open your eyes and it is stressful — all these highrises."
As it happened, the move opened the door to opportunities the Laights hadn't expected. The couple, who are in their 60s and 70s, bought a house in an area known as Plentong, just outside Johor Baru. They commute daily to Orchard Road, where they still run their human resources company.
Last year, the cheap rents on commercial property in Johor prompted the Laights to open a restaurant called Uncle Tom's Tavern near their new home. The new business has since stabilised and has added a rewarding new dimension to their lives. Now, the Laights leave home for Singapore at 8.30am, and head back to Plentong by 3.30pm. That enables them to reach their restaurant in time for the dinner crowd.
Life in Plentong hasn't been entirely pleasant, though. Since moving there, they have been the victims of a burglary and suffered a nasty road accident. But neither of them regrets the decision to move to Johor. "Here, there is fresh air. You can smell the grass when you wake up," says Michelle. The pace of life is slower and they have found it easier to make friends. "In Singapore, you can't just sit and talk. I always have my pen and paper and calculator. It's always about money," says Michelle.
Eric Wong, a semi-retired Singaporean, decided to take the plunge with a property in Iskandar Malaysia because it didn't cost much money. He bought a double-storey, semi-detached house in Bukit Indah as an investment for RM928,000 after learning about it from a brochure dropped in his letter box. "As soon as I saw it, I was interested," says Wong. "I went to S P Setia's sales office in VivoCity and immediately booked a unit. It's a fully gated community, so I think it's safe there."
Wong isn't renting out the house, though. Instead, he goes to his house in Bukit Indah in the morning after dropping his wife off at work and returns at mid-day to pick her up for lunch. According to him, he spends his mornings at the house, trading stocks and watering his lawn. He has spent only one night there since he bought the house three years ago. "I bought the place for future use. If I don't want it, I can sell it," he says.
Isn't it expensive to maintain a home that you don't actually use all the time? "Property tax is only RM55 a month, quit rent is RM10, security and maintenance is RM120, electricity is RM40, water is RM20, telephone is RM22 and Internet is RM50. I pay $140 in total to maintain the house," he says, showing The Edge Singapore his expense bill.
The way Wong sees it, the cost of the home and the monthly bills are a small price to pay for the enjoyment and future options it gives him. "My place is beautiful. The compound is big. There is nobody to disturb you," he boasts. "What more do you want for $300,000?"
A New Jersey or Petaling Jaya?
Where does Iskandar Malaysia go from here? Will it become more closely integrated with Singapore? And, will that keep property prices up? Agatino Rizzo, an assistant professor of urban planning at Qatar University, who led a research project and summer school on the Singapore-Johor Mega City Region from 2009 to 2010 at Universiti Teknologi Malaysia, says Johor is challenged by its lack of an educated and highly skilled workforce. As long as the knowledge gap between Singapore and Johor remains wide, Johor will not strategically benefit from rising costs in Singapore, Rizzo tells The Edge Singapore.
However, it is proving to be an attractive place for Singapore's working professionals and business people to live. Rizzo says there are already some 30,000 Malaysian workers who commute to work in Singapore every day. "So, I think that, given the cheaper price for high-end properties in Iskandar, if the Tuas Link will continue to provide efficient and rapid custom clearance, more and more Malaysian workers (professionals, educated and skilled labour) will choose to live in Iskandar," he says.
For Singaporeans to relocate to Iskandar Malaysia en masse, however, more conditions need to be met. Among other things, there would have to be lots of good English-curriculum schools as well as affordable facilities for leisure activities such as golf and sailing. It would also be imperative that there is a fast and reliable means of commuting to and from Singapore.
Is Iskandar Malaysia to Singapore what Shenzhen is to Hong Kong? Could it one day be to Singapore what New Jersey and Connecticut are to Manhattan? Or, closer to home, could it be to Singapore what Petaling Jaya is to Kuala Lumpur?
The obvious difference is that Malaysia and Singapore are separate countries. "Thus [the] Singapore-JB case is much more complex than [the] others, because besides financial and infrastructure challenges, we have more important political differences that are tied to history, post-colonial heritage and nation-building," says Rizzo.
Yet, there are examples of conurbations that transcend national borders. Denmark's capital city of Copenhagen is linked by a bridge to the Swedish city of Malmo, much as Singapore is linked to JB by the Causeway. Like Singapore and Malaysia, which were under British colonial rule, Denmark and Sweden, during the Middle Ages, were a single country, notes Rizzo. Copenhagen was the key centre of the empire at the time, while Singapore was a key centre of the Straits Settlements during the colonial era, he adds.
"However, [Copenhagen and Malmo] are contained within the European Union supranational organisation that is a much politically stronger union than Asean is. This united political platform [of the EU] provides for a common transport policy and sharing of benefits," Rizzo says.
The big question now is whether warming relations between Malaysia and Singapore forge closer cooperation and a stronger shared interest in Iskandar Malaysia. And, even if that happens, it remains to be seen how quickly that translates into an influx of business and people into the area.
Choo figures that the strong investor interest in his hometown is creating an exciting opportunity for property developers. And, he might get into the game himself. "I'm thinking of developing offices and link shophouses there," he says. But he's less certain if he would be prepared to invest in properties for yield and capital appreciation at this point. "Property prices are not cheap," he says. "Investment is not a good idea because there is too much supply."
For many Singaporeans, however, the steep discount in property prices across the Causeway versus the local market is too good an opportunity to pass up.
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Since it is quoted here, then someone can use my figure as another "unofficial" statistics :p
