Excerpt from article: iProperty.com | Southern Appeal

iProperty.com catches up with Wee Soon Chit, director of CB Richard Ellis (Johor) Sdn Bhd to find out his views on…

Johor’s property market
Wee feels that the outlook for 2010 is bright and the upward momentum that happened in the second half of 2009 will continue. He also finds that the general sentiments amongst developers and buyers seem to be more bullish after the uncertainty over the last two years.

Iskandar Malaysia’s effect on the property market
According to Wee, Iskandar Malaysia (IM) will be the prime mover for the growth of Johor property. Moreover, he opined that many infrastructure projects are under advanced stages of completion like the coastal highway linking Johor Bahru city (JB) to Nusajaya, the Eastern Dispenser Link connecting JB to North-South highway, as well as the upgrading works at Jalan Skudai, Inner Ring Road and Senai-Skudai arterial roads that are due to be completed in 2011.

“Accessibility will be improved and I foresee that it will push up property prices. Furthermore, the development of mega projects in IM like Medini, Educity, Afiat Health Park and Legoland will certainly go a long way to boost up the Johor property market,” said Wee.

Catalytic factors that make Johor attractive to investors and encourage further growth
Wee finds that four factors will influence Johor’s appeal and they are:

* Government policies: Policies must be consistent and transparent with no flip-flop change. Red tape to should be removed as well
* Infrastructure: Upgrading of infrastructure must continue
* Security: Safety has always been a major concern and drastic steps are needed to improve the situation
* Singapore: The clearance at the Johor Causeway must be improved to encourage more tourists coming in from Singapore

Whether current Johor property developments are attractive to foreign investors
“Johor property development is attractive to foreigners especially Singaporeans. One factor is because of the exchange rate. The other factor is because property prices are still relatively cheap compared to other locations in this region. The stability of government also plays a critical role,” opined Wee.

How Johor properties fare against Kuala Lumpur properties
Wee feels that the Johor property market has a long way to catch up with the Kuala Lumpur (KL) property market but IM will play a critical role in closing the gap. Population is a major factor as there are more people in KL (about 6 million) than JB (estimated 1.3 million).

To support his opinion, Wee highlighted RM500 per sq ft is normal for a condominium in KL and even those in the KLCC area are even fetching up to RM2,000 per sq ft. As for JB, the most expensive condominium in town fetches about RM350 per sq ft at most. However, there are some newer projects recently launched in JB that are testing above the RM400 per sq ft mark.

For retail, with the exceptionof Johor Bahru City Square and Tebrau EON City, the rental rates for the remaining shopping centres are low compared to those in KL.

Lastly for offices, Wee said that the highest rental rate is at RM3.20 per sq ft at Menara Ansar. Other good buildings achieve an average rental about RM2.50 per sq ft whilst rentals for older office building can go as low as RM1.20 per sq ft. In KL, rental for grade A buildings range from RM6 to RM8 per sq ft.