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PENGERANG in Kota Tinggi, Johor, has an abundance of natural resources and unique landforms. It was a place when once upon a time bauxite was extracted and was also famous as a fishing area and for its lobsters.

There is also Desaru, a favourite beach haunt among locals and Singaporeans — at least until the mid-90s.

But despite the seasonal economic activities, not much can be said about the little sub-district. Just like other small “sleepy hollows”, revellers came and went and many young locals, in search of greener pastures, looked elsewhere outside Pengerang.

Bandar Penawar is one of the earliest townships in Pengerang.
Bandar Penawar is one of the earliest townships in Pengerang.

While in the past, not many would have thought of settling down in the locality where everything seemed to be lacking, this has now changed — thanks to some mega projects in Pengerang.

Already an established tourism hub and a centre of education, Pengerang’s next target is to become an oil and gas and petrochemical hub. This will lead to more jobs and business opportunities and further cement its position as a new growth area.

To bring Pengerang to the next level in terms of tourist attraction, Desaru Development Holdings One, a wholly-owned subsidiary of Desaru Development Corp Sdn Bhd which in turn is a unit of Khazanah Nasional Bhd, is building the Desaru Coast Adventure Waterpark.

Touted to be one of the largest theme parks in the world and due to be opened in June this year, it will feature the largest wave pool in Southeast Asia, part of the 1,578ha Desaru Coast resort development, along Desaru’s 17km beachfront.

Complementing the theme park are world-class golf courses, a retail village, a convention centre and global hotel brands such as Westin, Anantara, Hard Rock Hotel and six-star Aman Resort and Villas.

Semi-detached houses now being built in Desaru Utama by SKS Group.
Semi-detached houses now being built in Desaru Utama by SKS Group.

For the petrochemical industry, much have been said about Petroliam Nasional Bhd’s (Petronas) Refinery and Petrochemical Integrated Development (Rapid) project and the Pengerang Integrated Petroleum Complex (PIPC). The government is targeting PIPC to be the region’s new oil and gas hub once it begins operations in the first quarter of next year.

The potential of nearby Bandar Penawar, as an education hub cannot be denied with the establishment of many higher learning institutions, namely the National Youth Skills Institute (IKBN), Institute of Science and Technology Darul Takzim (INSTEDT), Kolej Profesional Mara and Kolej Komuniti Bandar Penawar, while Taylor’s University and Universiti Teknologi Malaysia would be opening their campuses in the future.

Given these ongoing and future activities, there is a rising demand for residential properties. According to news reports, Johor Petroleum Development Corp Bhd had forecast population in Pengerang would swell to 70,000 by 2020, from 30,000 in 2010, with a shortfall of at least 3,500 homes.


It is now an exciting time to invest in the Pengerang property market due to the spillover effects from the projects, said two Johor market experts.

Taman Permata Penawar by Kejora Development Sdn Bhd.
Taman Permata Penawar by Kejora Development Sdn Bhd.

According to CH Williams Talhar & Wong Sdn Bhd director Tan Ka Leong, property prices had appreciated substantially since the announcement of the mega projects. However, he added that speculation too had been relatively rampant.

“There is actually a perception that there isn’t much remaining land (which is not part of the Rapid project linking to Desaru) at the locality. Landowners hope they can benefit from this.

“There are expectations from smallholders there. Prior to the PPIC project, there was nothing as it was just a fisherman village. You can get land relatively cheap like for RM2 or RM 3 per sq ft (psf).

“Since the Pengerang land acquisitions by Rapid, the compensation that owners got was RM5 to RM7 psf. Then other activities came in and that was when some (owners of existing land) saw the potential. The land can potentially be used for industries to support what PIPC is doing. Therefore, they expect prices to increase between RM20 and RM30 psf, triple or even quadruple,” said the surveyor.

Tan also said he was not surprised that landowners were building houses and renting them out for RM4,000 per month for landed properties.

“Not just in the Pengerang... in Desaru Utama, a double-storey linked house was being rented out at between RM4,000 and RM5,000,” he said.

However, Tan said this was going to be short term in nature, citing the Iskandar Puteri and Nusajaya cases.

At another emerging residential development called Taman Penawar Harmoni, affordable homes are being built.
At another emerging residential development called Taman Penawar Harmoni, affordable homes are being built.

“When there were a lot of catalystic developments in Iskandar Puteri, or previously called Nusajaya, by nature of the highway, Educity and Medini, there were so many market players and stakeholders that came in to develop catalystic projects like Legoland and Pinewood Studios.

“At that point of time in Nusajaya, there were very limited quality houses. For houses in places like Horizon Hills and even Bukit Indah where there were better accommodations, owners were able to get rental rates for a double-storey linked houses for RM4,000 to RM5,000. As more supply entered the market, the rental rate went lower,” said Tan.

He said prior to Bukit Pelali, a 146.9ha mixed-use leasehold township being constructed by Astaka Padu Sdn Bhd, it was hard for expatriates and workers to find good accommodation.

Tan said at least 1,000 to 2,000 linked houses would be built in the next five to six years to fill the demand there.

He said first-time house buyers won’t buy those houses as other than Rapid and PIPC-related activities, there will be nothing much they can do there.

“Unless they are from the locality or they are someone who depends on the opportunity being offered then they might buy. Investors are attracted by the RM4,000-a-month rental,” said Tan.


According to Maxxan Realty Sdn Bhd negotiator Afdhal Abas, one of the factors that have changed the Pengerang landscape is the mega projects, besides its strategic locations near Singapore and Indonesia.

She said demand among locals is still slow. However, investors and potential migrators from other states and even from outside the country are keen to invest in land, commercial and residential properties.

Afdhal said the Bukit Pelali township

is offering terrace, semi-detached, cluster homes, bungalows and villas with prices

ranging from RM380,000 to RM1.3 million.

“From a real estate company’s point of view, the market is determined by demand and supply of an area. It is not only because of the density and current development, but also its economic potential that can trigger the enhancement of infrastructures in that area,” she said, adding that all the current projects would have short- and long-term effects, too.

She said there are still affordable houses being built in the locality as the Johor government has made it mandatory to build the Rumah Mampu Milik Johor (RMMJ).

Rental rates have skyrocketed as an unfurnished single-storey terrace house in Bandar Penawar can be rented for RM3,000, while air-conditioned and fully furnished room can fetch RM2,000.

“This is due to the limited number of houses and settlements thereby making the rental game a temporary phenomenon. The emergence of unregistered brokers (individuals) who help out houseowners with an uncontrolled pricing and without following the rate fixed by valuer or BOVEA (Board of Valuers, Appraisers and Estate Agents), and current trend are other contributing factors,” said Afdhal.

Part 2 next week

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