Singapore and Malaysia’s proposed Johor-Singapore Special Economic Zone (JS-SEZ) is set to benefit major industries such as data centres, electronics, and renewable energy, according to a research study conducted by DBS. The JS-SEZ, which was announced last October during the 10th Singapore-Malaysia Leaders’ Retreat, aims to promote cross-border economic activities between the two states. The zone will be located in Malaysia’s Iskandar region, covering six districts and a total area of 3,505 sq km.
While specific details on the industries and incentives targeted for the zone are still being finalized, DBS economist Chua Han Teng believes that the data centre sector will be a key beneficiary. Johor is currently the fastest-growing data centre in Southeast Asia, with a significant growth in the past three years thanks to Singapore’s moratorium on data centres since 2019. The electrical and electronics sector in Johor is also expected to benefit from the JS-SEZ, as it has been identified as one of the priority industries in the state’s economic master plan.
Renewable energy is also anticipated to grow with the establishment of the JS-SEZ, as it has been identified as a key area of cooperation between Singapore and Malaysia. As activity in these different sectors picks up, the JS-SEZ will likely drive more demand for industrial properties in Johor, says Chua.
The JS-SEZ also offers an opportunity to leverage the strengths of both Singapore and Johor. The proposed zone is four times the size of Singapore and has a larger workforce, contributing to a lower labor cost. Additionally, the city-state offers strong capabilities as a financial centre and business hub, which will benefit companies in the proposed zone.
However, the JS-SEZ also faces challenges, such as addressing issues faced by Singaporean businesses operating in Johor, including manpower problems and challenges in the movement of goods between the two countries. To improve cross-border movements, businesses have suggested special immigration lanes and automated clearance using biometrics. Additionally, businesses have highlighted the need for a unified one-stop service centre to assist investors, and a joint investment promotion agency to market the zone and facilitate collaboration and networking opportunities.
Understanding the regulations and restrictions that govern property ownership in Singapore is crucial for foreign investors. While there are fewer restrictions for purchasing condos compared to landed properties, it is still important to be aware of the rules. Foreign buyers should note that they are subject to the Additional Buyer’s Stamp Duty (ABSD) of 20% for their first property purchase. However, these costs do not deter foreign investors from being drawn to the stability and potential for growth in the Singapore real estate market. In fact, many continue to invest in Singapore Condos due to its attractive qualities.