RHB Investment Bank (RHB) said today (May 13) they are upbeat with the recent news on the location of the Johor-Singapore Special Economic Zone (JS-SEZ), which will involve Iskandar Malaysia (IM) and Pengerang, covering a total of 3,505 sq km.
RHB expects major landowners ie UEM Sunrise, Sunway, and IOI Properties, with landbanks located at relatively more strategic areas in IM that are closer to the second link and Kulai, to benefit more.
The Johor State Government has also proposed 16 economic sectors to drive the state’s economic growth in future.
RHB maintain OVERWEIGHT on the move.
Big areas involved. Essentially, the entire IM (c.2,300 sq km) and Pengerang (c.1,200 sq km) will be included in the JS-SEZ.
Johor Menteri Besar Datuk Onn Hafiz Ghazi said the SEZ will involve six local councils – Johor Bahru, Iskandar Puteri, Pasir Gudang, Kulai, Pontian, and Kota Tinggi.
He added that the state government proposed 16 economic sectors, including E&E, medical, pharmaceutical, manufacturing, aviation, specialty chemicals, logistics, healthcare, education, halal industry, finance & business services, digital economy, tourism etc.
RHB understands green/renewable energy is included.
Economic activities to focus on key locations. In RHB’s view, the SEZ zoning is a lot wider than expected. Although the areas involved are huge, they think the infrastructure and key economic activities will likely focus on the greater area of key locations, such as Johor Bahru (ie the city centre of Johor), Iskandar Puteri, Pasir Gudang (both are mainly townships and industrial areas), Kulai (Senai International Airport, residential, industrial, and data centres) and Pengerang (regional oil & gas hub).
RHB believes upcoming news flow on the JS-SEZ will likely cover more details on the execution, which may include the implementation of a passport-free QR code clearance system, adoption of digitised processes for cargo clearance as well as potential incentives to be offered to players in the industries mentioned.
Major landowners in IM. Besides UEMS, Sunway and IOIPG, other major landowners in IM include Mah Sing, LBS, Eco World Development (ECW MK, NR), AME Elite Consortium, KSL (KSL MK, NR), Scientex (SCI MK, Neutral, TP: MYR3.85), IWCITY (IWCITY MK, NR), Crescendo (CCDO MK, NR), as well as other non-developers such as YTL Corp (YTL MK, NR) owning 1,640 acres in Kulai, MPHB Capital (MPHB MK, NR) owning 1,663 acres in Pengerang, and MMC Corp (MMC MK, NR) being a controlling stakeholder of Port of Tanjung Pelepas.
RHB will not rule out the possibility that some plantation companies that have sizeable plantation land in IM may also explore opportunities in the economic sectors mentioned in future.
Awaiting updates on major infrastructure developments and investments. In the pipeline, RHB is anticipating announcements on the proposed KL-SG high speed rail and the Johor Bahru LRT project.
RHB also expects more news flow to come on industrial and data centre investments in Johor that could lift market sentiment on the property sector further.
