gerbang nusajaya dtz report

8/17/2019 Gerbang Nusajaya Dtz Report

1/12

Market Assessment ofGerbang Nusajaya and

Iskandar Puteri.

COMPLETED BY DTZ CONSULTING AND

RESEARCH MALAYSIA AND SINGAPORE


2/12

Gerbang Nusajaya will spearhead the

next wave of growth in Iskandar Malaysia

Prepared for : UEM Sunrise Berhad

DTZ Nawawi Tie Leung Property Consultants Sdn Bhd

Suite 34.01, Level 34, Menara Citibank

165 Jalan Ampang

50450 Kuala Lumpur

DTZ Debenham Tie Leung (SEA) Pte Ltd

100 Beach Road

#35-00 Shaw Tower

Singapore 189702

30th April 2015

Contacts:

Saleha Yusoff

Director, Consulting &

Research

+ 603 2161 7228 ext 302

[email protected]

Brian Koh

Executive Director,

Investment/Consulting &

Research

+ 603 2161 7228 ext 300

[email protected]

Choon Fah Ong

Chief Operating Officer

Regional Head (SEA),

Consulting & Research

+ 65 6293 3228

[email protected]

Gerbang Nusajaya is set to be a major commercial hub, making

Nusajaya the engine of growth in Iskandar Malaysia.

Potential for 257,000 jobs to be created by catalytic developments in

Gerbang Nusajaya.

Future population growth will drive housing demand.

Concerns on oversupply and demand slowdown in Iskandar Malaysia

are of a short-term nature, unlikely to impede the progress of

Gerbang Nusajaya.

Strong fundamentals and opportunities

Iskandar Malaysia (IM), particularly Nusajaya, continues to benefit from

various committed investments and planned catalytic developments. Its

value proposition is increasingly attractive to Singapore.

Short-term concerns on oversupply and demand slowdown in Iskandar

Malaysia are actually driven by large scale launches of residential units in

Flagship A (Johor Bahru city centre), especially those launched by Chinese

developers. These are less threatening for Gerbang Nusajaya due to its

location and immediate connectivity to Singapore, served by the

Malaysia-Singapore Second Link.

With the presence of key catalytic developments ranging from tourism

and leisure, healthcare and wellness, education, creative to business and

industrial sectors in place to stimulate job creation and economic

activities, Gerbang Nusajaya is poised to generate strong population

growth that will drive housing demand.

mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


3/12

Market Assessment on Nusajaya and Gerbang Nusajaya DTZ Consulting & Research

Malaysia and Singapore

30th

April 2015 www.dtz.com

2

Huge potential lies ahead

DTZ believes that the 4,551-acre Gerbang Nusajaya, which has been

comprehensively master-planned by UEM Sunrise, will ensure long-term

sustainable growth and become a successful business hub in its own right.

With various planned catalytic developments, coupled with its ability to

capitalise on the proposed High-Speed Rail (HSR) station which is likely to

be located in Gerbang Nusajaya, it is capable of creating up to 257,000

jobs, resulting in rapid population growth and housing demand in

Nusajaya. Its developments will drive the commercial success of Nusajaya

from its strategic location between Malaysia and Singapore.


4/12



30th


3

Johor and Iskandar Malaysia outperforms the nation

Higher GDP growth

Johor’s economy has outperformed the nation

since 2009. On an average basis, Johor’s GDP

amounted to 9% of the Malaysia’s annual GDP

during 2005 – 2013.

Iskandar Malaysia, being the destination of 11%

of approved investments in Malaysia,

contributed about 70% of Johor’s GDP. High-

value jobs have been created, as evidenced by

its GDP per capita, which is 7% higher than the

national level.

Lower unemployment rate

The labour market also performed better, with

an unemployment rate of just 2.6% in 2014,

lower than the 2.9% recorded at the national

level. This can be partly attributed by a number

of pioneer projects in Iskandar Malaysia, which

have commenced their operations. Based on

census data, there is no shortage of labour

supply as more young people are entering the

workforce. Official census conducted in 2010

revealed that 42% of the Johor population aged

between 25 to 54 years old. It is projected that

this ratio will increase to 44% by 2030.

Given the continuous job creation in Iskandar

Malaysia, coupled with the increasing

workforce, the unemployment rate is expected

to remain low, going forward.

Figure 1: GDP Index

Source: Department of Statistics Malaysia,

IRDA, DTZ Consulting & Research, 2015

Figure 2: Unemployment Rate

Source: Department of Statistics Malaysia, 2014

80

90

100

110

120

130

140

2009 2010 2011 2012 2013

I n d e x

( 2 0 0 9 :

1 0 0 )

Malaysia Johor

Johor

Malaysia

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Malaysia Johor

Johor: 2.6%

Malaysia: 2.9%


5/12



30th April 2015 www.dtz.com

4

Singapore continues to complement Malaysia’s growth, including Iskandar

Malaysia

Iskandar Malaysia’s value proposition is

increasingly attractive

Singapore leads foreign investment in Iskandar

Malaysia, with a cumulative committed

investments totalled RM 12.1 billion during

2006 – 2014. Both the governments of

Singapore and Malaysia recognise the immense

benefit of twinning economic activities between

Iskandar Malaysia and Singapore. Bilateral co-

operation has deepened in recent years,

evident from the setting up of the Malaysia-

Singapore Joint Ministerial Committee of

Iskandar Malaysia (JMCIM) in 2013. This has

helped to facilitate the development of several

catalytic projects in Iskandar Malaysia, e.g. the

High-Speed Rail (HSR) and Rapid Transit System

(RTS).

Potential for business relocation

Recent developments in Singapore have

encouraged companies to venture into Iskandar

Malaysia. Rising business costs and tightened

foreign worker policies present challenges for

companies operating in the island-state.

Besides, the government, via International

Enterprise (IE) Singapore, has rolled out various

incentives and programs with the aim of helping

Small and Medium Enterprises (SMEs) to grow

overseas and stay competitive. Moreover, the

Economic Development Board (EDB) is

encouraging land-intensive activities to be

located in neighbouring countries, although it is

also targeting companies to site their high-value

and headquarter operations in Singapore.

Opportunities for land-intensive

businesses

Since it is increasingly challenging for land-

intensive industrial operations to find suitable

land plots in Singapore, the vast availability of

land and lower land cost in neighbouring

locations, such as Nusajaya, will continue to

attract land-intensive industries from Singapore

to relocate. For office-based activities, Nusajaya

offers opportunities for companies to further

reduce their operational costs as major

Business Process Outsourcing (BPO) and Shared

Services Centre (SSC) locations.

Spillover effect from Singapore

Cooling measures introduced by the Singapore

Government have encouraged outward real

estate investments, partly generating demand

for residential units in Iskandar Malaysia, as

transaction costs are significantly higher for

buyers of Singapore residential properties. The

Iskandar Malaysia residential market will also

benefit from the potential spillover effect of

population growth in Singapore, which is

projected to reach 6.9 million by 2030.

The proximity of Iskandar Malaysia offers

complementary locational advantage with

Singapore. It is an attractive proposition for

companies looking to invest in the region, as

they can position and develop their value chain

across both Singapore and Iskandar Malaysia.

With comprehensive infrastructure and

established labour pool, there is potential for

Nusajaya to attract companies from Singapore,

either to set up part of their operations, or for

complete relocation in the long term.


6/12



30th


5

Spearheading the next wave of growth

Gerbang Nusajaya is set to be the major

commercial hub in Iskandar Malaysia

With key projects such as Nusajaya Tech Park,

FASTrack Iskandar and Gateway CBD, Gerbang

Nusajaya is well positioned as the major

commercial hub in Iskandar Malaysia, making

Nusajaya the engine of growth due to its

immediate connectivity from the Malaysia-

Singapore Second Link and the proposed High-

Speed Rail station. Given the catalytic

investments in education, manufacturing,

healthcare, tourism, creative art and

entertainment, job creation and population

growth will trend towards Nusajaya.

According to UEM Sunrise, Gerbang Nusajaya

will create 213,000 high-skilled jobs. This is in

line with our base case scenario which

estimates a minimum creation of 177,800 jobs.

However, there is an upside potential as it is

able to capitalise on the proposed High-Speed

Rail. If Gerbang Nusajaya is chosen as the

location of the High-Speed Rail station, more

commercial activities can be expected and this

in turn will support the creation of more job

opportunities. With more business activities,

the potential for a more intensive usage of land

is positive and this could give rise to a higher

potential of 257,000 jobs.

Future population growth to drive housing

demand in Nusajaya

About 30% of Iskandar Malaysia population will

be based in Nusajaya. With the presence of

High-Speed Rail, the number of households in

Nusajaya will be 14% higher than the base case

scenario, widening the residential demand from

57,600 units to over 85,000 units.

Figure 3: Job Creation in Gerbang Nusajaya

Source: DTZ Consulting & Research, 2015

Increasing population and tourist arrivals

will spur leisure and retail sectors

Tourist arrivals in Johor will continue to rise,

driven by leisure projects, as well as high-value

business sectors and industries, which attract

business travellers. According to the Ministry of

Tourism, Johor hosted 5.77 million of hotel

guests in 2013, 46% higher than in 2012. With

an assumed growth of 5% per annum, the

number of tourist arrivals is set to reach 13.23

million in 2030, giving rise to demand for an

additional 14,000 hotel rooms.

The increase in tourist arrivals, coupled with the

population growth, will spur the retail sector. In

order to cater to the rise in demand, an

additional 9.6 million square feet of retail

spaces, or approximately 15 new malls will be

required.

Gerbang Nusajaya is well positioned to cater for

such growth given its proximity to Singapore

and various catalytic developments in Nusajaya.

58.3

116.7

177.8

2.5

82.1

164.2

257.1

0

50

100

150

200

250

300

2015 2020 2025 2030

' 0 0 0 j

o b s

without HSR with HSR


7/12



30th


6

Figure 4: Projected commercial-related jobs in Gerbang Nusajaya

Source: DTZ Consulting and Research, January 2015.

Figure 5: Housing Demand in Nusajaya

Source: DTZ Consulting and Research, January 2015.

24,284

48,068

79,779

500

48,068

95,635

159,058

-

10

20

30

40

50

60

70

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2015 2020 2025 2030

i l l i o n s q f t

E m p l o y m e n t - C o m m

e r c i a l

Commercial NLA (million sq ft) with HSR (RHS)

Commercial NLA (million sq ft) without HSR (RHS)Employment - Commercial without HSR (LHS)

Employment - Commercial with HSR (LHS)

195,339

223,087

0

50,000

100,000

150,000

200,000

250,000

Nusajaya : No. of Housing Units

Nusajaya : No. of Households without HSR

Nusajaya : No. of Households with HSR

85,362 units

7,760 units per annum

Potential supply of 65.69 million sq ft of commercial space

Supporting 159,058 commercial-related jobs


8/12



30th


7

Figure 6: Projected Population Growth in Iskandar Malaysia

Source: IRDA, DTZ Consulting and Research, January 2015.

Perceived downside risk of Iskandar Malaysia property market – the perspective

from Gerbang Nusajaya

The roots of perception

The state of Iskandar Malaysia property market

has been widely perceived as worsening

following the emergence of Chinese developers

who flooded the market with large-scale

launches of high-rise residential units located in

strategic sea-front areas in downtown Johor

Bahru. Their projects, coupled with those

launched by Malaysian developers, have

stiffened the market competition. Our

estimates revealed that these sea-front land

parcels in Johor Bahru city centre will have at

least 20,000 high-rise residential units.

The aggressive move of foreign developers, plus

new cooling measures such as the revised RM 1

million floor price for foreign buyers, and

stringent lending conditions have exerted

pressures on Malaysian developers, resulting

amendments in their development strategies.

DTZ understands that some have lowered their

sale targets and are now becoming more

realistic than during the peak time of Iskandar

Malaysia.


9/12



30th


8

Huge supply of high-rise residential units in

Johor Bahru city centre

DTZ noted that the concerns on the issue of

oversupply and the slowdown in demand are

actually driven by recent developments in the

residential sector in Johor Bahru city centre.

While the recent measures introduced by the

Government may have dampened the demand,

most of the high-rise residential projects tend

to target the same group of buyer, namely the

investors. Our site visit revealed that landed

projects, which are mostly located outside the

Johor Bahru city centre, have achieved good

take-up. Beside investors, these landed

residential projects also attract existing

homeowners who are keen to upgrade their

lifestyle. Demand for commercial properties is

positive as it will benefit from the spillover

effects of various committed investments. Also,

high-grade gated and guarded industrial units

with large built-up are highly sought.

Figure 6: Incoming and Planned Supply of

Residential Units in Iskandar Malaysia

Source: NAPIC, DTZ Consulting and Research,

January 2015.

Less threatening for Gerbang Nusajaya

From the perspective of Gerbang Nusajaya, the

issue of oversupply of residential properties and

demand slowdown is less threatening due to

two reasons, namely the long term nature oftownship development, and the key catalyst

projects that will generate the necessary

demand for commercial properties. Its location,

being at the western corridor of the Iskandar

Malaysia, coupled with the size of the land

which spans over 4,000 acres, offers untapped

opportunities to create synergies. This is

something which many developers, with their

limited land parcels in the much-focused Johor

Bahru city centre and Medini, are unable to

achieve. Although Medini is also situated within

the same flagship, it is developed by many

different developers; whereas Gerbang

Nusajaya is master-planned by a single entity.

This allows UEM Sunrise to create its own

demand drivers for the residential and

commercial components at its own pace.

A trending-upward demand is expected, given

their existing projects such as Nusajaya TechPark and FASTrack Iskandar which will create

high-income jobs. For instance, it is estimated

that the annual salary of an electrician working

at FASTrack Iskandar would be 3.5 times higher

than the national average. This is positive for

Gerbang Nusajaya as workers are able to afford

a better lifestyle. Moreover, the proposed

Gerbang Nusajaya High-Speed Rail station will

create positive spillover effects.

Nusajaya

26%

Rest of

Iskandar

Malaysia

74%

185,886 units


10/12



30th


9

Conclusion

The Nusajaya of tomorrow will be totally

different from today. DTZ believes that Gerbang

Nusajaya, which has been comprehensively

master-planned by UEM Sunrise, will ensure

long-term sustainable growth and become a

successful business hub in its own right. It is the

new catalyst that will spearhead the next wave

of growth in Iskandar Malaysia.


11/12



30th


10

Business Contacts

Business Space/Occupier Services

Yasmine Mohd Zamirdin

Associate Director

Phone: +60 (0)3 2161 7228 ext 288

Email: [email protected]

Investment Advisory

Sr Low Han Hoe

Senior Manager

Phone: +60 (0)3 2161 7228 ext 278



Brian Koh

Executive Director

Phone: +60 (0)3 2161 7228 ext 300



Saleha Yusoff

Director

Phone: +60 (0)3 2161 7228 ext 302


Property Management

T.Subramaniam

Director

Phone: +60 (0)3 2161 7228 ext 310


Residential

Eddy Wong

Managing Director

Phone: +60 (0)3 2161 7228 ext 380


Residential

Chong Yen Yee

Associate Director

Phone: +60 (0)3 2161 7228 ext 381


Retail

Ungku Suseelawati Ungku Omar

Executive Director

Phone: +60 (0)3 2161 7228 ext 330


Retail

Wong Suet Pink

Associate Director

Phone: +60 (0)3 2161 7228 ext 338


Valuation

Sr Daniel Ma Jen Yi

Director

Phone: +60 (0)3 2161 7228 ext 222


Valuation

Hanafi Abd Rahman

Manager

Phone: +60 (0)3 2161 7228 ext 225


Disclaimer

This report should not be relied upon as a basis for entering into transactions without seeking specific,

qualified, professional advice. Whilst facts have been rigorously checked, DTZ can take no responsibility

for any damage or loss suffered as a result of any inadvertent inaccuracy within this report. Information

contained herein should not, in whole or part, be published, reproduced or referred to without prior

approval. Any such reproduction should be credited to DTZ.


12/12

gerbangnusajaya.com

gerbang nusajaya dtz report

Documents