jb inner city faces chronic shortage of top-tier business...

JB INNER CITY Property Report | 2018 Q1

JB Inner Cityfaces chronic shortage of top-tier Business Centres

JB Inner City is the next closest area to CIQ after JB CIQ area. Some of the tallest buildings in Malaysia - Astaka and SetiaSky88 reside here and were built in anticipation of the completion of RTS in 2019.

JB Inner City prices declined by 6.0 percent this period following a drop of 0.2 percent in the previous bi-annual period. The average and median price differs vastly at RM 815818 and RM 620500 respectively.

JB Inner City covers a diverse area from the more affordable Larkin suburb to City Centre area. The price differs significantly with the former below RM500psf while the latter is close to double the amount.

Larkin area has a large population base of upgraders and players like M Condo and Seasons Luxury should easily absorb demand. City Centre needs strong impetus like the RTS to overcome supply issues.

There is a chronic shortage of top-tier office buildings and The Coronation Park, Iskandar International Business Centre fills the void. Strong demand awaits this class of Grade A Commercial offices.

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ISKANDAR PROPERTY2018 Q1 | PRICES, SUPPLY, TRENDS AND FORECAST

JB INNER CITY

The lskandar Property Report which began in 2012 Q1,

tracks the high-rise residential properties in lskandar Malaysia on a

bi-annual basis, giving vital statistics such as prices,

supply units, market trends and opinion pieces.

Pioneered by Datamine, it adopts a Census Tracking

methodology and not sampling, giving rise to a

most complete and reliable time-series property info

in this region.


Overall JB Inner City PriceOverall JB Inner City median property price was RM 620,500 in Mar 2018. Measured by price per square foot, Johor Bahru Inner City stands at 605psf in Mar 2018, a marginal drop from RM612psf in Sept 2017 and RM670psf in Mar 2017. The base year in Mar 2012 was RM578psf.

JB Inner City Property Price

Iskandar prices must be interpreted with the understanding that they are consolidated across eight areas: JB CIQ, JB Inner City, JB Outer City, Puteri Harbour, Medini, Rest of Iskandar Puteri and Tebrau Coast. The respective areas reflect a vastly differing psf and price movement as a result of a mix of macro and micro economic factors. This area-specific report will provide heightened insights into each area and their forecasts.

CAUTIONSTATEMENT

Johor Bahru Inner City Price MovementJB Inner City average prices declined by 6.0 percent in the Mar 2018 period. This follows a decrease of 0.2 percent in Sept 2017 and 0.8 percent decrease in Mar 2017. It was 25.7 percent higher compared to the base year in Mar 2012.

Top and Bottom 3 Prices The priciest properties are Astaka, Straits View 18 and Summerscape. The least costly are Scott Tower Larkin, M Habitat and City Woods in Mar 2018.

Top and Bottom 3 in PSFThe highest PSF properties are Astaka, Sks Pavillion Residences and Setiasky88. The lowest PSF are Scott Tower Larkin, EPIC and Larkin Heights in Mar 2018.

Supply of Residential PropertiesLaunched between 2012 and Mar 2018, JB Inner City logged a total of 27 high-rise residential properties releasing a total supply of 13450 units.

CommentaryThe JB Inner City saw the completion of numerous properties during this period and a correlating decrease of 6.0 percent in the average price. The main contributor was Pinnacle Tower with the 15-20 percent drop in price.

DANGABAY

JB INNER CITY

XXX psf

JB CIQ

JB OUTER CITY

643,250

702,000

712,110 710,091 706,663

680,680 683,683

703,818 703,480 703,649

620,500

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2012 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 2016 Q1 2016 Q3 2017 Q1 2017 Q3 2018 Q1

JB Inner City: Median Price (2012 - 2018 Q1)

7003

20

6492

02

4707

11 6207

848133

66

8158

08

4561

69

1098

750

JB CIQ JB INNE R CITY JB O UTE R CITY DA NG A B A Y

JB Inner City: Average Price (2012 and 2018 Q1)2012 2018 Q1

25.2%

1.8%

-4.5%

-0.5%-2.9%

0.4% 0.0%

-1.9%

-8.6%

-1.2%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 2016 Q1 2016 Q3 2017 Q1 2017 Q3 2018 Q1

JB Inner City: Median psf % change

▪ Increase ▪ Decrease

XXX psf

XXX psf

XXX psf

Charts available in full version




OVERVIEW

In JB Inner City, properties that are closest to the CIQ command the highest price and gradually declines as it moves further outskirt. There are 3 main clusters and some scattered ones.

A. Prime City Area but not within walking distance to CIQ are Astaka, SKS Pavillion, Twin Galaxy, D’Esplanade, Setiasky88, The Straits, Summerscape, Citywood, Straits View 18, Paragon Residences, Southkey Mosaic, Golden Sands, 1 Tebrau and Pinnacle Towers. Together they command an average of RM798psf.

B. Wider Larkin Area comprising Scott Tower Larkin, EPIC, Larkin Heights, M Condo and D’ Tasek. Their average price is RM430psf

C. Eastern Inner City before the Permas bridge Grandview 360, Crescent Bay, Botanika, Southkey Mosaic, Marina View and Wave Marina Cove. The average price is RM661psf

D. Discontinued/delayed projects are Sun City, Marina Bay Suites, 8 Tebrau to name a few.

LATEST HAPPENINGS

Final StagesThe remaining properties built during the 2012 boom are in their final stages of completion. They are Astaka,

SKS Pavillion and Southkey Mosaic. Some appeared to have stalled such as Botanika and Marina Bay Suites. They will add to the over-supply stock. However, those in good location targeting mid-range segment fare better. They are Twin Galaxy, D Esplanade and Golden Sands.

Astaka, the tallest residential property in Malaysia and Singapore is near completion. Rising 1000 feet, its selling point is a proposed dedicated tunnel that links to the CIQ. We continue to monitor this claim while construction is on-going.

Following the media release that the RTS will be delayed to 2024, prices softened by around 8-10 percent. Tri Tower and Setiasky88 held on to the RM1300psf and RM1200psf respectively prior to the announcement.

Prices have retracted by around 10 percent while the largest downward price movement was Pinnacle Tower from RM900+psf region to 700psf region. SKS Pavillion maintained at RM950psf, and justifiably so, with the upcoming RTS within 15 min walking distance to its premise.

PROPERTY REVIEW

AffordableLarkin area has the highest concentration of affordable properties in JB Inner City area. Average property prices are under RM500psf and there is strong demand for upgrader in this

JB Inner City

JB Inner City is the next closest area to the Causeway Immigration after JB CIQ. It covers a diverse area from the city centre along the New York Hotel landmark to the more affordable suburb of Larkin. It includes Eastern area just before Permas Jaya bridge. The full listing of properties is featured in the ‘Property Update’ section of this report.

largely mature suburb. Strong take-up contributors are Larkin Heights, M Habitat and M Condo. The next tier is D Tasek and Seasons Luxury. EPIC recorded the lowest price.

Strategic location. Twin Galaxy, Setiasky88 and Pinnacle Towers sit along the same street as the famed New York Hotel. While driving distance to the immigration is less than 10 minutes, the single lane access will likely be challenging once occupancy improves. Moreover, the completion of these 3 properties around the same time, has led to a temporary surge in supply. Prices have eased, Pinnacle Tower in particular, due to strong competition in the area.

Likewise, the four properties at the fringe of Permas Jaya heading to Tebrau Coast share the same fate. They are Grandview 360, Crescent Bay, Wave Marina Cove and Botanika. Wave Marina Cove had a strong attraction where ‘water-taxi’ was proposed in the area, linking directly to Tanjung Puteri. Under the master plan, Tanjung Puteri was designated as a major transport hub but has now transferred to R&F.

Utmost ChallengeJB CIQ properties pose utmost competition to prime JB Inner City area. Both areas are contingent on proximity to the CIQ with the former having the advantage of being within walking distance to the hotspot. Many of the standalone properties in JB Inner City will need enhancements like free shuttle service or other incentives to challenge the upcoming R&F retail offerings that will make JB CIQ the top choice among dwellers and investors.

INSIGHTS


PROGRESS UPDATE

Vantage Bay | xxxxx

Sks Pavillion |Size: xxx sqft Median psf :xxx

Sun City | Size: xxx sqft Median psf :xxx

Twin Galaxy | Size: xxx sqft Median psf :xxx

Pinnacle Tower |Size: xxx sqft Median psf :xxx

Setia Sky 88 | Size: xxx sqft Median psf :xxx

Completed

Completed

Completed

Completed

Sales Enquiry: 07-2669652


PROGRESS UPDATE

Vida Heights |Size: xxx sqft Median psf :xxx

M Habitat | Size: xxx sqft Median psf :xxx

Straits View 18 | Size: xxx sqft Median psf :xxx

Twin Tower Residence | Size: xxx sqft Median psf :xxx

The Peak | Size: xxx sqft Median psf :xxx

Marina Residence | Size: xxx sqft Median psf :xxx

Completed

Completed

Completed

Completed



PROGRESS UPDATE

The Straits | Size: xxx sqft Median psf :xxx

Southkey Mosaic | Size: xxx sqft Median psf :xxx

Wave Marina Cove | Size: xxx sqft Median psf :xxx

Crescent Bay | Size: xxx sqft Median psf :xxx

Citywoods |Size: xxx sqft Median psf :xxx

Marina Bay Suites | Size: xxx sqft Median psf :xxx

Completed

Completed

Completed



PROGRESS UPDATE

EPIC | Size: xxx sqft Median psf :xxx

Grandview 360 | Size: xxx sqft Median psf :xxx

D Tasek | Size: xxx sqft Median psf :xxx

M Condo Larkin | Size: xxx sqft Median psf :xxx

Astaka | Size: xxx sqft Median psf :xxx

Botanika | Size: xxx sqft Median psf :xxx

Completed

Completed

Completed

Completed

Completed



PROGRESS UPDATE

Paragon Residences | Size: xxx sqft Median psf :xxx

Summerscape | Size: xxx sqft Median psf :xxx

Scott Tower Larkin | Size: xxx sqft Median psf :xxx

Seasons Luxury | Size: xxx sqft Median psf :xxx

1 Tebrau Residences | Size: xxx sqft Median psf :xxx

Larkin Heights | Size: xxx sqft Median psf :xxx

Completed

Completed

Completed

Completed

Completed

Completed



PROGRESS UPDATE

Golden Sands | Size: xxx sqft Median psf :xxx

D Esplanade | Size: Size: xxx sqft Median psf :xxx

Completed

Completed



FORECAST

OVERVIEW

• In the short term, Prime JB Inner City properties that are targeted at the high-end market will continue to face stiff competition from those in JB CIQ and Danga Bay area. The former dominated by R&F has large land-bank engulfing the prime JB CIQ area while Danga Bay has large tracks of sea-frontal reclaim land on standby by Tropicana.

• The chronic glut situation can only be resolved with better and faster connectivity with Singapore where strong demand is hampered by the infamous Causeway traffic. The rapid supply occurred as a result of the anticipated RTS due for completion in 2019, but has now been pushed to 2024 and its expected to draw ten thousand commuters per hour.

• There is a high probability that the RTS will move ahead as the construction cost is a fraction of the HSR. The former is estimated to be RM4 billion while the latter at RM110 billion. In addition, the immense mutual benefits particularly to Singapore are highlighted in our opinion piece on “JB-Singapore Connectivity. Who benefits more? ”.

• Foremost benefits to Singapore are:

- Solution to HDB Leasehold time boom.- Higher standard of living for Singapore’s geing population- Lowering business cost for Singapore.

• Malaysia will likely renegotiate the terms in view of its appalling fiscal position or to arm-twist Singapore over ‘water issue’ to get this project moving. One of the election contentions that swayed the Malaysian vote was congestion on the Causeway Bridge.

• Nonetheless prices will continue to hold up well close to the RM1000psf range as visible signs of the RTS gets underway. Temporary car parks around the CIQ are already constructed to make provisions when the Bukit Chagar area is cleared for the RTS station. The RTS ‘raised columns’ have also been erected along the Sultan Ibraham main road.

• Larkin area offers a much lower initial launch price will have less of an impact as upgraders in the area will gradually absorb supply. M Condominium, Larkin Heights and Seasons Luxury are gradually filling up likely at the expense of older apartments in the area.

• The most affected area is likely to be properties at the fringe of Permas Jaya heading towards Tebrau Coast - Wave

Marina Cove, Botanika, Crescent Bay Suites and Grandview 360. The bridge heading toward Tebrau Coast/Permas Jaya is a traditional bottleneck. Again, these properties face stiff competition from lower-priced dwellings in JB CIQ area particularly V Summerplace and Skysuites.

OVERCOMING IT

The over-supply in this area is significant and demands fast response. There is an urgent need to re-visit the initial masterplan. In the most affected area ie fringe of Permas Jaya, ‘water-taxi’ was initially proposed to by-pass the bottle-neck jam at the bridge. Overall Iskandar should urgently consider this mode of transport similar to Bangkok.

In the master plan, Tanjung Puteri area was earmarked as a transport hub, a confluence of RTS, bus terminal and ferry services. The Berjaya land where KFC is located at Stulang should be considered for reclamation for this purpose.

Again the RTS is the single most important factor that will drive demand and flow of consumers throughout JB City area.


TECHNICAL NOTESInitiated in March of 2012, the Iskandar Property Report meets the need for a systematic information resource to help home buyers and investors make informed decisions around Iskandar investments. Pioneered by Datamine, a leading market research and consulting firm, we expertly track Iskandar’s high-rise residential property space.

Conducted bi-annually in March and October, the Iskandar Property Census applies census-tracking methodology for the most accurate and timely statistics. Led by full-time researchers, our fieldwork is done on site and via telephone interviews. Our key aim is to achieve a detailed profile of Iskandar’s building progress; accuracy of pricing; and area-specific surveys.

In-house processes include data collection, processing, analysis, and reporting. The research spans the latest median prices and changes; supply units; market share and size; cumulative launches; rental yield; market trends; and more. Visuals of various projects and their surrounds are presented in our Consulting Series.

DefinitionThe word ‘property’ used here covers high-rise residences such as serviced apartments, condominiums, SOFOs, and SOVOs. Properties without facilities like medium- to low-cost apartments are excluded of this classification. The Iskandar Property Census has been tracking this segment since March 2012 for private investors and is now made available to the mass market.

Data QualityCensus data is accrued via on-site visits, face-to-face interviews, and telephone exchanges; visuals are secured on location at scheduled intervals. Datamine runs comprehensive tracking studies around Iskandar’s properties. During sales office closures or product relaunches, where data may be absent, an imputation exercise is used to determine median prices.

Research MethodologyThe Iskandar Property Census fieldwork is executed in June and December, which is the midway point of our bi-annual release periods of March and October. Between Q1of 2012 and Q1 of 2014, prices were tracked on a quarterly basis and averaged to shape the bi-annual reports.

Price ComputationConsolidated Prices at regional and Iskandar as a whole is computed using the weighted average median prices. They are weighted by volume supply.

Report CoverageOur full report cover the following specifications:• Project name and developer• Market size and share• Market share by location – Johor Bahru, Iskandar Puteri, Tebrau Coast• Cumulative units launched• Property Price Index (base year: 2011Q4)• Annual and Quarterly Price change• Median and Average Prices (by location)• Segmentation by location and type• Top 5, Bottom 5• Trends in pricing• Leasehold vs Freehold status• Area specific breakdown• Project Completion date

Area CoverageOur classification in this research segments Iskandar Malaysia into three main regions.

Region Area

Johor Bahru JB CIQ, JB Inner City, JB Outer City, Danga Bay

Iskandar Medini, Puteri Harbour, Puteri Rest of Iskandar Puteri

Tebrau Coast Tebrau Coast

FrameworkThis study entails research information on properties built from the base year of 2012 Q1.

DisclaimerThe contents of this report were analysed and presented with every conceivable degree of care and diligence. Datamine makes no claims of error-free computations. We are not liable for any such loss or damage suffered as a result of the direct or indirect use of the information in this resource.


Our research team consist of skilled professionals and rigorously trained graduates. We give priority to hiring an all-Johorean squad who embraces the Bangsa Johor tradition to participate in the Iskandar success story. Each member contributes to the depth and relevance throughout our research process.

JERREN LAI Head of Research

SEAN ZHOU Research Analyst

CHRISTINE KWANResearch Manager

WONG JUN MANResearch Analyst

SHAMSUDDIN BIN NORDIN Operations Manager

SKYSUITES #21-10 Jalan Bukit Meldrum,

Johor Bahru 80300

[email protected] : 018-7658230

Acknowledgement

The Research Team

The Iskandar Property Report and

www.iskandar-property.my website

is named in honour of Almarhum

Sultan Iskandar Ibni Almarhum

Sultan Ismail Al-Khalidi, the 4th

Sultan of Johor widely regarded as

the father of modern Johor.

Datamine endeavours to be a

contributing player in the journey

of making Iskandar Malaysia a

success story. It stands together

with the government of the day

to overcome any shortcomings

in the property sector by offering

a reliable source of market

research services and insights to

stakeholders.

LEE PEI SHIDigital Marketing

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