Johor’s industrial properties defy slow market

Johor’s industrial property market continues to be the top destination for investments despite the sluggish property market due to its proximity with Singapore.

The southern state’s industrial developments drew RM27 billion in the first half of 2015 (1H2015) -- the biggest portion of investments into the manufacturing sector -- compared with RM21 billion for the whole of 2014, said CBD Properties (Johor) Sdn Bhd head of agency Lily Lo.

This is reflected in rising transactions of industrial properties, she added.

“The most attractive segment in Iskandar Malaysia’s property market today is industrial. In the first quarter of 2015, the number of industrial transactions in the state jumped 51.8% year-on-year and 16.1% quarter-on-quarter,” she said.

KGV International Sdn Bhd (Johor branch) director Samuel Tan concurred, pointed to figures from the National Property Information Centre that showed only the industrial subsector grew in Johor -- by 3% in 1H2015.

This contrasts with the 38.4% and 31.5% declines in the residential and commercial subsectors over the same period, he said.

Johor’s industrial developments also saw progress, recording good occupancy rates.

“The occupancy rate at most of the existing and established industrial parks is more than 70% while in recently completed and ongoing projects, it is about 40% to 50%,” said C H Williams Talhar & Wong (WTW) Sdn Bhd (Johor branch) director Tan Ka Leong.

Moreover, Johor’s proximity to Singapore has raised the state’s profile, as Johor is a convenient location for the island republic’s enterprises expanding their businesses.

The industrial developments in the state have attracted mostly small and medium enterprises (SMEs), cottage industries and light to medium manufacturing businesses, of which 60% are local and 40% foreign.

“Many SMEs from Singapore have relocated to Johor due to its proximity,” said Knight Frank Malaysia Sdn Bhd (Johor Branch) executive director Ricky Lee Kong Wah. - The Edge Property