Johor will be Malaysia’s next growth engine thanks to Johor-Singapore SEZ and Forest City SFZ
13 Aug 2024
Johor is poised to be the country’s growth engine with the Johor-Singapore Special Economic Zone (JS-SEZ) and the Special Financial Zone (SFZ) in Forest City as key drivers.
RHB Research said JS-SEZ is designed to foster stronger business connections and improved connectivity between the two countries.
“We view all these positively, as it indicates that both the Malaysia and Singapore governments are working well together, and Johor may be able to capture a stronger inflow of investments from Singapore going forward,” it said.
The country’s third largest state by gross domestic product contribution, economic growth for Johor is expected to continue to surpass the national gross domestic product (GDP) average, said RHB Research.
It said Johor stands out with its strategic location, advanced infrastructure, and a diverse economic landscape that includes robust manufacturing activities and a strong services sector.
“We believe the government-led catalytic developments as well as an influx of foreign and domestic direct investments will help to lift the construction, data centre, energy, petrochemicals, industrial, tourism sectors, in addition to a positive spill over to the property market,” it said in note.
The firm said the work progress on the RTS Link project has significantly boosted buyers’ confidence, given the visibility of growth prospects for Johor.
The RTS Link is a game changer, as increased cross-border traffic and the powerful “SGD factor” should benefit the local real estate sector, including housing, retail, and hospitality.
It said demand for rental and housing in the central region of Johor is likely to grow more significantly in the coming years, while the influx of new investments will translate into higher affordability in the long run.
“Major developers remain confident in the long- term outlook with Johor continuing to be an important market.
“We like UEM Sunrise Bhd and Sunway Bhd in the Johor property space. For construction, we highlight Sunway Construction Bhd, Kerjaya Prospek Group Bhd, and Malaysian Resources Corp Bhd. “Other beneficiaries of the Johor growth story include Tenaga Nasional Bhd, YTL Power International Bhd, AME Real Estate Investment Trust and VS Industry Bhd,” it added.
Source: NST
