Selling land to manufacturers is better than to developers

Recently, I went to JB thrice within 2 months. Once for vacation, second one for business and third one for a short break plus a speaking engagement invitation from a friend. In brief, I think JB is doing fine and just need to keep the momentum going amidst current negativity. I was in 4 different malls and all four were full of cars, whether J plater or even S plates. That includes Johor Premium Outlet too which I still think is the best premium outlet even as Malaysia has more of these coming up. Next one will be opening soon in Penang. However, I have to agree that without a faster creation of jobs, many of these new residential units may be empty since even the links are not happening anytime soon which meant that staying in JB and working in Singapore is very inconvenient to do. Then, I read something good to share.

I think this is a good piece of news for the property market in JB. The focus should not only be on building ever more homes or selling even more land plots to developers. Reported in StraitsTimes was a piece of news of UEM Sunrise Bhd’s intention to sell land plots to companies from South Korea, Japan and Taiwan. UEM Sunrise Bhd is the largest landowner in Iskandar. Its Chief Executive Officer Mr. Izzaddin Idris said, “These investments, which would help the region attract the right mix of industries and tenants, could be announced as early as the first quarter. Full article here.

whyiskandarOne recent deal was in June when UEM Sunrise agreed a 10.2ha plot in Iskandar to South Korea’s Amorepacific Corp, which will be developing an integrated centre for research and development, manufacturing and logistics of its cosmetics products. 500 new jobs are expected to be created from this new facility. He also said this, “When we sell land bank, we are forgoing future development profits. But we are focusing on trying to bring industries to the region.”

I do think however that the advantages islonger term. The future development profit may increase instead of reducing once the area becomes even more prosperous from the creation of more jobs. Most of the time, when these huge companies move in, their vendors would also be moving in too, creating a spillover effect for the whole area. Let’s wait for the announcements of the actual company names coming. Happy believing.

written on 6th Nov 2016

Next suggested article:   Iskandar property price to surpass Greater KL

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