Design Economics Example 2 - Iskandar

7/28/2019 Design Economics Example 2 - Iskandar

1/52

ISKANDAR MALAYSIABRIC & Mortar - InvestmentOpportunities in Emerging Market

August 5,

2008

Presented by :Presented by :

Dato Ikmal Hijaz Hashim | CEODato Ikmal Hijaz Hashim | CEO

Iskandar Regional Development Authority (IRDA), MalaysiIskandar Regional Development Authority (IRDA), Malaysi


2/52

AGENDA

No. AGENDA

1.Introduction to Iskandar

Malaysia

2.

Investment Opportunities

2


3/52

INTERNATIONAL POSITIONING

OF ISKANDAR MALAYSIA At the heart of South East Asia and within

minutes from Singapore

Strategically located at the cross roads of

East-West trade lanes

Midway between the growing economy of

China and India


4/52

GEOGRAPHICALCOVERAGE

RegionArea

(km2)Population (million) Density

IskandarMalaysia

2,217

1.4

(Projected 2025: 3.0

million)

631

Singapore 690 4.1 6,003

Dubai 3,885 1.2 309

Hong Kong 1,095 6.9 6,301


5/52

LONG-TERMASPIRATIONS2005 Projected (2025)Population Size 1.4 million 3.0 million

GDP (PPP) in USDbn

20.0 93.3

GDP (PPP) in bn 10.1 47.1

GDP per capita (PPP)in USD

14,790 31,100

GDP per capital(PPP) in

7,469 15,706

Labour Force 0.62 million 1.46 million

Employment 0.61 million 1.43 million

Unemployment 3-4% 1.8%


6/52


7/52

IRDA KEY FUNCTIONS

Establish policies, direction and strategies Integrate and coordinate Identify and recommend new policies Undertake social and infrastructure projects

Promote and stimulate investments Facilitate economic, physical and social

development

Coordinating agent To receive, process and expedite approvals

Process

Promotion

PlanninPlannin

gg

7

Iskandar Service Centre

Toll free: [email protected]

A Statutory Body by Act of Parliament IRDA Act2007


8/52

PROGRESS OF ISKANDAR

MALAYSIA200708

2025

Phase 1:Planning

Phase 2:Mobilisation &

Transition

Phase 4:Widening theDevelopment

9/2005

15 months

12 months 7 years

12 years onwards

Established IRDA & IIBand built capacity.

Secured selected masterinvestors in selectednodes.

Announced incentives &

support package in Node1.

Developed socialdevelopment blueprint.

Commencedimplementation ofselected RMK-9

projects.

Completed conceptplan - Sep 2005.

Launched Iskandarand CDP - Nov 2006.

Passed IRDA Bill -Dec2006.

2020

2/2007

Outcomes:

2005 Now

Phase 3:Catalytic

Development

2006

Achieve strong andsustainable metropolisof internationalstanding.

Expand efforts toenhance image andvalue of Iskandar.

2015

Phase 5:Realising the Vision

Complete JSNAC.

Focus development inselected nodes to controlsupply.

Implement 2-3 highimpact catalytic projectsto induce demand.

Develop hardinfrastructure in selectednodes.

Build human capital tosupport catalytic projects.

Expand developmentselectively intoneighbouring nodes.

Enhance soft and hardinfrastructure inIskandar.

17 years onwards

Completed

Iskandar is 22 months old; we are entering Phase 3 Catalytic Development and BuildingMomentum

9 9

9

9

9

9

9

9

9

9

9


9/52

CONTRIBUTION OF FDI IN

ISKANDAR MALAYSIA ISHIGHER THAN MALAYSIA RM billion

FDI has surged in Iskandar, accounted for 80% of manufacturing investments in2007 (up from 70% in 2006), vs Malaysia of only 55%

1

IskandarMalaysia

Malaysia Iskandar


10/52

Source: IRDA, Khazanah, SJIC, MIDA and various corporate announcements

Investments already committed to date in Iskandar: RM36bn ($5.5bn),representing 76% of total investment target of RM47bn or 7.3bn (2006-2010)

INVESTMENT TARGET FOR

ISKANDAR MALAYSIA IS WELLON-TRACK


11/52

FLAGSHIP ZONESJB CITY CENTRE

NUSAJAYA

WESTERN GATEDEVELOPMENT

EASTERN GATE

DEVELOPMENT

SENAI-SKUDAI Catalyst development to complementexisting strategic industries in Johor

11

1


12/52

INVESTMENTS IN FLAGSHIP A

AACMP - Lido

Boulevard

GDV: RM2.7bn

Danga Bay -Tune Hotels

12

Iskandar Investment - Oakwood Service

Apartments

GDV: RM200 million

Danga Bay - Danga Island

GDV: RM790 millionTarget sales launch April 2008

Danga Bay -

Grand Siam Hotel

Cost: RM120mn

Start (April

2008)Target forcompletion 2010

Danga Bay - Casa AlmyraGDV RM125mn

Target for completion 2009

Danga Bay

Promenade

Johor Corp

upgrading

KOMTAR

- RM55mn

-1.2 ha opencar park

-Start nov07,complete

2009

Gerbang

Perdana/JKR -

CIQ

To commence

in July 08

(light vehicle)

1

2

3


13/52

INVESTMENTS IN FLAGSHIP B

BB

UEM Land - Johor

State New

Admin.Centre

(JSNAC)

GDV: RM1.5bn Won Msian

Institute of

Planners

ExcellenceAward 2008

UEM Land - Puteri Harbour

GDV: RM13bn Key signings: Limitless, Dubai World

Iskandar Investment - EduCity

GDV: >RM1 bn over 7 years, area: 305 acres Newcastle Univ invited to set up medical faculty in

educity

UEM Land - Southern Industrial Logistics Clusters Thematic Industrial Park GDV: RM1.8bn Key signings: HG Metal, Jurong Tech

UEM Land - Afiat Healthpark

Signed BLA with Columbia Asiafor 70-bedded hospital.

Iskandar Investment- Node 1GDV : RM42bn

Mixed Urban Development

Iskandar Investment

International Destination Resort

GDV: USD1.5-2.0bn

3,321 acres

Target to announce by Dec 08

JV KST (60%): Symphony Int (40%)Aman Resort (46 acres)Cost: RM58mn, 2008-2010

4

1

2

3

5 6


14/52

INVESTMENTS IN FLAGSHIP C

14

CCAsia Petroleum Hub KIC

Bunker Terminal in Tanjung Bin

GDV: RM1.4 billionBuilt on manmade islandlocated 700m from PTP

MMC Corp/Dubai WorldMaritime Centre at Tg BinInitial investment of RM2.0-2.3bn, Total expected FDI of RM17-20bnTotal area of 2,255 acresKey activities:

Port-related Industrial & Commercial

activities General Cargo Terminal suitable for non-containerized cargo, heavy cargo & ro-ro Liquids Terminal with jetties, tank farms andprocessing plantsEmployment of > 3,000

MMC Corp

PTP expansion (RM1.5bn)

Berth 11, 12, 13 and 14Capacity to increase by 3.2mn TEUs to11.2mn TEUs by 2010

Expected to attract additional FDI of

RM5bn by 2010

1

3

2


15/52

INVESTMENTS IN FLAGSHIP D

15

DD

Johor Corp

RM500mil plant to make flexible pipes in

Tanjung Langsat Industrial area Technip

Group (France)Johor Corp

Acerinox and Nisshin RM5 bil steel plant inTanjung

Langsat

Johor Corp

Pacific Oleo chemical (subsidiary of Lam Soon)

to construct a RM300mil oleo chemical plant in

Tanjung Langsat

Johor Port and Pasir Gudang Industrial Area


16/52

INVESTMENTS IN FLAGSHIP E

EE

MMC Corp BhdIntergrated Airport City in SenaiJohor Premium Outlets

MSC Cyberport Johor

Cybercity in Senai

148 acresCost : RM400mn (phase 1)

MMC Corp Bhd

Senai Hi-Tech Park

1,000 acres

Submission ofmasterplan in June

1 2

Johor CorpJohor Technology Park & SedenakIndustrial Park

3


17/52

UK INVESTORS INISKANDAR

17

Vita


18/52

AGENDA

18

No. AGENDA

1.Introduction to Iskandar

Malaysia

2.Investment Opportunities in

Iskandar Malaysia


19/52

ISKANDAR MALAYSIA OFFERS

THE RIGHT INGREDIENTS:

3 world-class ports and 1 international airport Connectivity highways, train, broadband, availability

support services Competitive incentives

Availability quality skills/manpower

Consistent Government policy Creation of IRDA to facilitate businesses & investments Public funding on upgrading infrastructure

Ease of capital & goods.

Leveraging on the close proximity to Singapore to tapbusiness opportunities & established infrastructure

Midway between China and India

Sustainable economic growth for ASEAN region

StrongGovernment

support

Infrastructure:

Soft & hard

StrategicLocation

Returns Attractive upside potential Inter and Intra business opportunities Cost competitiveness


20/52

INVESTMENT OPPORTUNITIES

IN ISKANDAR MALAYSIA

Set up new business in one of the 9 promoted economicclusters

Relocation of existing operations

Offer innovative financing for developers and investors

Purchase land/property for development/investment

Joint-ventures with key landowners/developers

Invest in property companies/ REITs

Finance

Operations

Real

Estate


21/52

THANK YOU

Iskandar Service CentreToll free: [email protected]

www.iskandarmalaysia.com.my

Main Office:

Level 8 Menara MSC Cyberport5 Jalan Bukit Meldrum

80300 Johor Bahru

Tel: + 607 218 3010Fax: + 607 218 3111

Satellite Office:

Suite 5-3 5th FloorBlock 3B Plaza Sentral

Jalan Stesen Sentral 550470 Kuala LumpurTel: + 603 2260 6777Fax: + 603 2260 7999


22/52

GDP GROWTH %

2008

2009

Source: EIU


23/52

KEY DEVELOPERS IN ISKANDAR

MALAYSIA


24/52

CONCEPTUAL MASTERPLAN

Estimated RM2 Billion (0.3bn) Development Cost and Potential to AttractRM16 Billion (2.5bn) in Foreign Direct Investments


25/52

JOHOR STATE NEW ADMINISTRATIVE

CENTER (JSNAC) Phase 1 Overall Progress at 96.2%

Phase 2A Earthworks at 88.0%

Phase 2B Layout plan approvalpending

Phase 3 Approval of Cabinet Paperpending


26/52

OAKWOOD SERVICE APARTMENTS

1. One six (6) storeypodium block

2. Two (2) blocks 0f 33storey residentialapartments (Tower A -261 units)(Tower B - 262 units)

3. One (1) block of 22storey tower serviceresidence (Tower C 267 units)

4. Project Duration :Aug 2008 Aug 2011

5. GDV : RM 592 mil(91mn)


27/52

PROMENADE

1. Estimated Cost of RM250 mil (39mn)

2. Boutique Hotel forHoliday Makers andInvestors in IskandarMalaysia

3. State of the art FitnessCentre and SPA


28/52

GLOBAL PLAYERS IN PTP

Tiong Nam

Attracting global brands worth more than of RM3 billion (0.5bn)investments, si nificant contributor to Johors FDI


29/52

ASIA PETROLEUM HUB


30/52

EDUCITY


31/52

AMAN RESORT

Proposed Aman Resorts at Sungai Kemudi

Sg. Kemudi188.838 ac

AmanResorts

Proposed Aman Resorts at Sungai Kemudi


32/52

AIRPORT DEVELOPMENT LAYOUT

New Road

Access CargoApron

PassengerApron

Senai Cargo

Hub(Starts 2007)

PASSENGERTERMINAL

SENAI AIRPORTAEROSPACEDEVELOPMENT

SENAI CARGO CENTRE

SENAI AIRPORTLOGISTICS &FREE ZONE

DEVELOPMENT

AIRSIDE INFRASTRUCTURE

SENAI COMMERCIALDEVELOPMENT


33/52

CONCEPTUAL MASTERPLAN OF HI-

TECH PARK

1,000 acres

RailPort

INTEGRATEDCOMPONENTS

Techno-centre Zone

R&D Zone

Communication and

Call Centre Zone

High TechManufacturingand Assembly Cluster

Business andCommercialDistrict

COMPREHENSIVE MASTER PLAN CURRENTLY BEING DEVELOPED BYINTERNATIONAL CONSULTANTS


34/52

PUTERI HARBOUR

Progress Photos

Commercial South

Precinct ARetail & Residential

Precinct B

Hotel & Service Apartments

Precinct CWaterfront Villas

Precinct A1Retail & Residential

Inner LagoonPublic Marina

Precinct DTransport Hub, Convention Centre & 4-

star Hotel

PROGRESS

PHOTOS


35/52

TUNE HOTEL IN ISKANDAR

MALAYSIA 6 storeys

220-room Budget Hotel

Owner : Tune Hotel Sdn Bhd

(Subsidiary of Air Asia)

Project Duration : June 2008June 2009

Estimated Development Cost : RM20mn


36/52

GLOBAL PLAYERS IN FLAGSHIP D

NAIGAI NITTO


37/52

NODE 1

37 37

1 2

International Mixed-used Development

City Centre, Financial District, Golf Village,

Amusement Bay, Residential District,Logistics Village, Creative Park, Medical &

Wellness Village, Heritage District

Key Players : Kuwait Finance House,Mubadala and Millennium Development

97 million sq ft / 2,230 acres in NusajayaGFA 183 million sq ft

Initial investment of US$1.2 billion (RM4.1billion)

Expected GDV = US$ 20billion over 15-20years

(25% within 7 years)


38/52

MIDDLE EAST INVESTMENTS IN

ISKANDARThe biggest single investments in Malaysia with initial investment ofUS$1.2bn (0.6bn), and total GDV of US$20bn (10.1bn).

Investments breakdown:

Investors Value (USbln)

Area (acres) Development Type

Kuwait Finance House 0.33 620 Cultural Village

Mudabala Devt.Company

0.52 1,240 Lifestyle Centre

Millennium Development 0.33 365 Financial District Zone

Total 1.20


39/52

MIDDLE EASTERN

COMPANIES IN ISKANDARMALAYSIA

O S O


40/52

INTERNATIONAL DESTINATION

RESORT

40


41/52

FLAGSHIP ZONES

41

NUSAJAYA

Johor New StateAdmin Centre

University ParkMedical HubInternationalDestination Resort

Southern Industrial

Logistics Clusters

WESTERN GATEDEVELOPMENT (PTP)

Port Tanjong PelepasFree Trade Zone2ndLink AccessRAMSAR WorldHeritage Park

Tanjung Piai

Southernmost tip of Asia

EASTERN GATEDEVELOPMENT(PASIR GUDANG

AREA)

Tanjong LangsatIndustrial Park

Pasir Gudang PortTanjung Langsat Port

SENAI-SKUDAI

Senai International

AirportSenai Cargo HubSenai MultimodalCentre

Skudai KnowledgeHub

Hi-Tech Park

JB CITY CENTRE

New Financial District

Danga Bay IntegratedWaterfront CityUpgrading of CBDTebrau PlentongMixed Devt.Causeway


42/52

SIX SELECTEDCLUSTERSCreative Industries creative and design film and television games and animation

content generation creative R&D visual and performing arts

Tourism

hotels theme parks, amusement and familyentertainment centres etc

conference and exhibition centres regional operation of hotel andleisure services

Financial, advisory andconsulting services

Islamic financial services SSO/BPO corporate consultancy and advisory

Healthcare and related

hospitals and alternative medicine integrated dental and orthodonticservices

healthcare R&D integrated lab services

Logistics and related

integrated supply chain services high value supply chain services andsolutions

Educational Services universities colleges skills trainings institutes R&D institutions regional training centres


43/52

COMPETITIVENESS OF MALAYSIA

Malaysias competitiveness in the region augurs well for the development ofIskandar

IMD WORLD COMPETITIVENESS YEARBOOK2008Country/Economy Rank Score

United States 1 100

Singapore 2 99.3

Hong Kong SAR 3 94.9Switzerland 4 89.7

Luxembourg 5 84.4

Denmark 6 83.9

Australia 7 83.5

Canada 8 82.9Sweden 9 82.5

Netherlands 10 80.5

Norway 11 79.5

Ireland 12 77.6

Taiwan 13 77.4Austria 14 75.028

Finland 15 75.025

Source: IMD International

Country/Economy Rank Score

Germany 16 74.7

China 17 73.8

New Zealand 18 73.4Malaysia 19 73.2

Israel 20 72.4

United Kingdom 21 71.9

Japan 22 70.0

Estonia 23 69.6Belgium 24 68.7

France 25 66.0

Chile 26 64.1

Thailand 27 63.1

Czech Republic 28 62.2India 29 60.6

Slovak Republic 30 59.4


44/52

AGENDANo. AGENDA

1. Challenges & Opportunities

2.What Iskandar Malaysia can

offer to Japanese investors?

3. Incentives

4. Capital Appreciation

5 Investment Opportunities

44


45/52

AVAILABLEINCENTIVES

45

Existing Pre-PackageIncentives

Existing CustomisedIncentives

Tax incentives as offered byMIDA and MITI

Incentives as in Promotionof Investments Act, 1986 and

various gazette orderspursuant to Section 127 ofIncome Tax Act

Examples include Investment

Tax Allowance (ITA),Reinvestment Allowance(RA) and Pioneer Status, etc

Investors who meet pre-requisite criteria set out byMIDA and/or MOF

Bilateral in nature (based on

request and consultation)with no specific guidelines

Customised based on theprojected net economic

benefit from the investment


46/52

ISKANDAR MALAYSIAS

INCENTIVES

New

incentivesfor Iskandar

Malaysia

Applicable

for 6selected

clusters

Wheres thelocation?

Who will beeligible?

What are theincentives?

Fiscal

Non-Fiscal

IDR-StatusCompany

Approved

Developers

ApprovedDevelopme

ntManagers

Node 1

and anyother

designatednodes

ForeignKnowledge

Workers

exemption fromincome tax up to 10years

exemption fromwithholding tax forpayments to nonresidents

exemption from FICGuidelines

flexibility to source

capital/financingglobally unrestricted

employment of foreignknowledge workers

46

Investors in IskandarINVESTORS IN ISKANDAR


47/52

Investors in Iskandar

NAIGAI NITTO

47

INVESTORS IN ISKANDAR

MALAYSIA


48/52

48

COMPARISON OF PROPERTY PRI

SIGNIFICANT INCREASE IN


49/52

SIGNIFICANT INCREASE IN

LAND VALUE

UEM Land sales(Prior to 2005)

Node 1(Aug 2007)

UEM Land sales(Dec 2007 to Feb 2008)

Land tenure Freehold 99 year lease Freehold

Land price(RM per sq ft)

UK1 1.5 per sq ft(Gamuda JV, others)

UK7 per sq ft UK8 per sq ft(Limitless)

Development price(RM per sq ft of GFA)

UK20 per sq ft(Nusa Idaman)

N/A UK35 40 per sq ft (EastLedang)

Comparison of Land Value Pre and Post IskandarMalaysia

UK1 psf

UK8 psfUK7 psf


50/52

Government Investments:Major Projects inISKANDAR

(2006-2010))

50

Projects *Cost (RMbn)

Roads and Highways 4.96 (0.77)

Environmental Projects:

River Cleaning, Sewerage andFlood Mitigation

1.20 (0.19)

Security 0.33 (0.05)

Total 6.48 (1.01)

* 1 : 6.459 Malaysia Ringgit (as at 31 July 2008)

WORLDS LEADING BRANDS IN


51/52

WORLD S LEADING BRANDS INISKANDAR MALAYSIA

Genting has signed an MOU with Chelsea Property Group to jointly

study the establishment of Premium Outlets branded centers in Kulai. Chelsea is the worlds largest developer, owner and operator of outlet

shopping centers, with interests in 46 Premium Outlet Centers locatedin the United States, Japan, Korea and Mexico.

Premium Outlet offers discount of 25%-75%

FDI BETWEEN STATES IN 2007


52/52

FDI BETWEEN STATES IN 2007

ISKANDAR is ranked high in terms of FDI in Malaysia

% of FDI Total FDI (RMbln)

Design Economics Example 2 - Iskandar

Documents

Transcript of Design Economics Example 2 - Iskandar