What new initiatives is Iskandar Investment Berhad (IIB) involved in?
IBRAHIM: IIB is a strategic developer involved in catalytic projects. The 4 main sectors in which we are involved in are education, leisure and tourism, healthcare and wellness, and creative. In all of these clusters we have our own flagship. Within the education sector, we developed EduCity. In leisure, we have LEGOLAND. In healthcare and wellness, we established a joint venture with Khazanah, which is going to undertake the development of an urban and wellness resort. Lastly, in the creative sector, we have the Pinewood Iskandar Malaysia Studios. We have conducted some analysis in terms of what are the critical components in each vertical in order to build viable catalytic projects. The ultimate objective is to create a vibrant economic environment and to ensure that the growth we have witnessed so far will continue to prosper in a sustainable manner.
What is the structure of Iskandar Malaysiaâ€™s bodies?
IBRAHIM: One of the reasons I took up the challenge of working in this company is because of the structure I have seen. You have the Iskandar Regional Development Authority (IRDA), which is the regulator. They are the ones who conceptualized the comprehensive development plan, as well as the type of free work and architecture necessary for our visions to become concrete. The other structure that has been created in Iskandar Malaysia is IIB, which represents the commercial investment arm. IIB was created because it was acknowledged that some of the projects, which will transform the urban operating environment, could not be undertaken by entities in the private sector due to the inherent commercial risk. As a result of the development and completion of these catalytic projects, we have seen that the construction industry has benefited substantially. Looking forward, we would like to see our success reflected on the ability of the developers to sell their products and have a return on their investment. Ultimately, if the investors are successful, it means that we did a good job.
What is the nature of IIBâ€™s joint venture with Sunway?
IBRAHIM: We have signed a joint venture with Sunway for the development of a 700 acre property. Because of its size and extension, this will be a high-end residential, commercial, retail, and development area. The advantages that we have consist of the presence of water and natural vegetation, which I consider to be the number one USP. You cannot create a similar landscape artificially. This is one of the ways we create value out of our natural attributes. We are quite confident that this collaboration with Sunway will result in an iconic development for the real estate landscape, not only in Malaysia, but in the region too.
Geographically speaking, where does Foreign Direct Investment (FDI) come from?
IBRAHIM: A significant amount of investment came from the Middle East during the financial crises of 2008, and that is how IIB started. Foreign investment also came from countries such as Singapore. We expect a significant amount of investment coming in from China, Japan, and South Korea too. We are currently looking at Indonesia, which represents a huge potential with a very interesting and exciting market. We have not been there, but we are intensifying our efforts and making visits to Indonesian companies. Hopefully our meetings will be fruitful and will be able to make some announcements in the second half of the year.
From a transportation point of view, in what ways will developments in Iskandar be linked to Singapore?
IBRAHIM: Currently, we have 2 links. One is the former link, whereas the second one is the coast way link. A 3rd link is the MRT, which is going to be extended by 2018. We are also in the advanced stage of completing the customs and immigration complex of Puteri Harbour, which will be the 4th link through the sea. To this end, we are currently engaging with UEM Land, who are discussing with some operators to get the services from Singapore to Puteri Harbour and vice versa. Connectivity is actually quite critical to enable seamless transportation between Singapore and Malaysia. If we are able to provide that kind of efficient transportation, the value of Iskandar Malaysia will be unleashed. This is, in fact, the right time for potential investors to invest, because the prices are still reasonable and attractive. There is a strong upside to put money in now instead of later.
We are talking about a huge region; a territory of 2,217kmÂ², which is about 3 times the size of Singapore. So we have to make sure that this growth is sustainable.
What kind of opportunities exists for people who are looking to allocate funds into this region?
IBRAHIM: Well, I see Iskandar Malaysia as one of the most attractive investment destinations globally. I am not being biased. I think that here, we talk about substance. We have seen Japan becoming one of the biggest foreign buyers of houses in Malaysia. The interesting trend that is taking place now is that the corporate sector and the property companies from Japan, China, and South Korea are relocating their premises to Malaysia. This is due to the fact that, in China, for instance, the real estate market is saturated. Likewise in Europe, they are looking to invest in a place that gives them a reasonable level of return from investment. IIB is perfectly positioned to capitalize on all these trends because we have good infrastructure, good support from the federal government, and we are also strategically located close to Singapore. Being a government owned company, we will ensure that our projects are sustainable. This is actually a journey that will take a long time, at least 20 years. We are talking about a huge region; a territory of 2,217kmÂ², which is about 3 times the size of Singapore. So we have to make sure that this growth is sustainable in order to realize the vision we have articulated for Iskandar Malaysia.
Looking forward, how will the Iskandar region contribute to the overall economy of Malaysia?
IBRAHIM: When you look at our cluster development strategy, you will notice that one of our objectives is to create industries. This is because when you create industries, you create job opportunities, and when you create job opportunities, you are expanding the market. So this is how the region will contribute to the overall economy of Malaysia. The kind of industries that we are going to be established will be related to services. Iskandar Malaysia will be the driver of a service-based, high-income economy, supported by the federal government. In terms of education, we will be supplying the talented human capital required by these type of industries. These talents will not only be migrants, but also local people.