THE healthcare and industrial sectors are glowing in Johor’s Iskandar Malaysia despite the challenging market environment, thanks mainly to strong interest from foreign investors.
Knight Frank Johor brand head Debbie Choy said although certain sectors like the high-rise residential segment may be experiencing an oversupply, opportunities in healthcare and industrial sectors continue to draw investors.
She said the macro statistics for Iskandar Malaysia remain strong and encourage positive sentiment in the market.
“One of the key elements that would further drive inbound investment into Iskandar Malaysia is perhaps in having sufficient talent pool to support the respective industries. An overflow effect from the increased working population leading to higher demand for housing may benefit Iskandar Malaysia in the longer term,” said Choy.
Some of the private hospitals in Iskandar Malaysia are Columbia Asia Hospital, Regency Specialist Hospital, Gleneagles Medini Hospital, Puteri Specialist Hospital, Landmark Medical Suites and Kempas Specialist Hospital.
Upcoming healthcare developments include TMC Life Sciences Bhd’s Thomson Iskandar Medical Hub, part of the RM5 billion Vantage Bay Healthcare City project in Iskandar Malaysia, and Khazanah-Temasek’s Afiniti Medini and Avira Medini integrated wellness projects.
Thomson Iskandar has commenced construction and is slated for completion by 2023. It will house the 500-bed Hospital Iskandariah, 400 special medical suites and related health and wellness facilities.
Knight Frank Singapore consultancy head Tay Kah Poh said Singaporean investors are positive about the healthcare sector in Iskandar Malaysia due to its proximity to the island-state, a favourable exchange rate and quality healthcare services.
“Major healthcare players, such as Thomson Medical and Gleneagles, have built and operate quality healthcare facilities in Johor, and the clustering will act as a huge draw for patients from Singapore,” she said.
SCALING UP INVESTMENTS
From its inception in 2006 till the first half of this year, Iskandar Malaysia recorded cumulative committed investment of RM302.09 billion.
With its current performance, the southern economic corridor is expected to exceed the targeted investment of RM383 billion by 2025.
Top foreign investors are those from China, Singapore, Japan, Spain and the United States.
Knight Frank Malaysia said in a statement that RM172.2 billion, or 57 per cent of the total investment, had been realised as of the first half of 2019 with 39 per cent being foreign direct investment (FDI) mainly from China (RM40.65 billion) and Singapore (RM20.57 billion).
The Chinese have been investing heavily in property developments while Singaporeans continued to eye the manufacturing/logistics sector, it said.
Prime Minister Tun Dr Mahathir Mohamad had said in February that the government was looking to double the size of Iskandar Malaysia.
The economic region sits on land three times the size of Singapore and two times the size of Hong Kong.
The region currently encompasses most of southern Johor totalling 2,217 sq km and is being expanded to cover an area of 4,749 sq km. The new areas will include parts of Kluang, Kota Tinggi and Pontian, and will be for land development and modern agriculture.
Iskandar Regional Development Authority (IRDA) chief executive officer Ismail Ibrahim said with the larger area, Iskandar should be able to offer more land for development at an affordable cost and bring modern agriculture as one of its new promoted sectors.
Knight Frank Malaysia managing director Sarkunan Subramaniam said foreign investors were mostly focused on lower operation cost, strategic location and talent pool/skilled labour in making their decisions to invest in the region.
He said the availabilities of such factors attract investors as the impact of lowering operating expenses in the flow of supply chain on a long-term basis is essential for businesses to remain competitive.
“The manufacturing/logistics sector has been rosy with more market activities during the first half of 2019. Now investors are also eyeing the healthcare sector, a specialised asset class deemed defensive within its niche market,” added Sarkunan.