Iskandar Investment believes that 2012 will be the tipping point, the moment when it will be able to see results, for Iskandar.
Field of Dreams is an old movie that came to mind during a recent media briefing. Starring Kevin Costner (good in Prince of Thieves, bad in Waterworld), it was about a corn farmer who built a baseball field in his farm because he kept hearing a voice saying "if you build it, he will come". Indeed, he built it and the ghosts of some famous baseball players came and played.
When the senior management team of Iskandar Malaysia gave an update on what is probably the country's biggest property development, what struck me was how they struggled to get local investors and developers at the start.
Three times the size of Singapore, Iskandar would be our biggest special economic zone meant to lure foreign and local investments, create new jobs and boost the economy.
Khazanah Nasional Bhd's 60 per cent unit Iskandar Investment Bhd (IBB) had some quick wins at the start. It got major Middle Eastern investors involved in a mixed development project in the Medini flagship zone.
Its most successful flagship zone is probably EduCity, a high education hub. Some five institutions have already agreed to set up shop and the allocated land area is already full, about two years ahead of schedule.
Since 2006, IIB has invested more than RM1 billion to build infrastructure like roads and schools. Most of the roads are set to be completed this year.
But there were challenges like the collapse of Dubai's property market, which meant IIB had to woo investors from other regions. Another major hurdle was how it was not able to convince major investors from its most obvious target market - Singapore.
Iskandar was designed specifically with the island-republic in mind. It was only five years later, on June 27 in fact, that its state investment arm Temasek agreed to jointly invest and develop land in Iskandar with Khazanah.
Since Temasek is also the major shareholder of large Singapore firms like CapitaLand and Mapletree, it is only natural to expect their involvement in Iskandar.
An interesting development is also how the Temasek and Khazanah tag team is willing to partner developers for projects in Iskandar. They did this with Eastern & Oriental Bhd, a day after their announcement, and more developers are likely to follow since they will be able to share the risk with two strong partners.
IIB believes that 2012 will be the tipping point, the moment when it will be able to see results, for Iskandar. I think it already knows that it has crossed that point.
The signs are there. More universities want to set up shop although EduCity is already full. EduCity 2 is in the works. Demand for land is so strong that it may develop those earmarked in later years quicker.
IIB should know. It has been building for the past five years and they are now coming. – Business Times
