M’sia, S’pore JV to boost both economies — Report

JOINT DEVELOPMENT: Photo shows the Singapore skyline. Singapore can leverage on Malaysia’s growth potential while Malaysia can tap on Singapore’s track record on execution.

KUCHING: Improving ties between Malaysia and Singapore can maintain growth sustainability in the next five years and the growth can return to pre-Asia financial crisis if the relationship strengthens further.

In making the call, a report by HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) stated that a collaboration to develop integrated development of six land parcels and projects at the Iskandar zone would have multiple spin-offs for the economies.

The joint venture (JV) amounting to RM30 billion would be jointly invested by investment arm of the Malaysian government Khazanah Nasional Bhd (Khazanah) and its Singaporean counterpart Temasek Holdings (Temasek).

The research house noted that the rapid transit link between Singapore-Johor Bahru for seamless connectivity by 2018 which would boost cross border travel and tourism. To recap, both countries had agreed in May last year to land swap deals for Malaysia’s railway land in Singapore for the parcels of land at Marina South and Rochor.

Details were later released at end of last month on further cooperation where two joint ventures companies, M+S Pte Ltd, and Pulau Indah would be set up to spear head the developments in Singapore and in the Iskandar zone.

Delving further, M+S Pte Ltd would be set up to develop four land parcels in Marina South and two land parcels in Ophir-Rochor.  Khazanah would hold 60 per cent and Temasek would hold 40 per cent in the joint venture.

Total project costs were estimated to be RM27 billion with a gross floor area (GFA) of 50,020 square metres (sqm) which would include office, residential, hotel and retail components.

The Pulau Indah ventures, equally owned by Khazanah and Temasek, would develop projects in Iskandar Malaysia with two sites in Nusajaya and Urban.

Wellness development in Medini North and the Resort Wellness development at the Heritage Cluster in Medini Central had been confirmed with a combined gross development value of RM3 billion and a permitted GFA of up to 1.37 million sqm.

Pulau Indah planned to develop serviced apartments, a corporate training centre, as well as commercial, retail, residential and wellness-related offerings on the sites. Planning and design works for the projects had already commenced in first quarter of 2011.

HwangDBS Research opined, “The proposed Johor-Singapore rapid transit link by 2018 and potential bullet train to KL will make traveling between Singapore and Malaysia even more seamless.

“Such infrastructure development will further support growth in the coming years and Malaysia will remain as one of Singapore’s top international visitor arrivals (IVA) source markets.”

The research house continued, “The sectors which will benefit from the new initiatives are Singapore property, construction, transport and Malaysia property and construction.

“Improved traffic and commuter flow between Johor Bahru and Singapore should lift the hospitality sectors in Singapore and investments into Johor.

“There are many areas of cooperation such as banking, manufacturing, logistics and environmental which were left behind after the Asia financial crisis.

“Rising costs in China, Asean-China free trade agreement promoting a free tariff zone with China, rising external competitive pressures, and strong government incentives are some of the factors which may make this possible this time round,” the HwangDBS Research report concluded.

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