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Friday, April 5, 2013

CIMB Research bullish on Iskandar Malaysia growth story (STAR)

KUALA LUMPUR: CIMB Equities Research is still upbeat on the growth prospects in the Iskandar Malaysia region in Johor after a visit to various sites there.

"We visited Nusajaya, Setia Eco Gardens, Port of Tanjung Pelepas and Mah Sing's Meridin@Medini while hosting Benalec, Johor Petroleum Dev Corporation, Kulim Malaysia and Axis REIT briefings as well," it said in a report released on Friday.

It noted UEM Land had an upper hand in choosing its joint venture partners in Nusajaya now given that the brighter prospects seen as Iskandar reached a tipping point in 2012.

It also said demand for industrial property in the region was surprisingly strong.

"For example, SP Setia's non-Bumi industrial properties in Setia Business Park priced between RM3.2mil and RM8.5mil have been fully taken up while Axis Group's phase 1 of SME City was sold out in two hours. "Many buyers are Singapore small and medium enterprises looking to shift to a lower-cost destination. We view this very positively as it will help bring development, jobs and economic activity to the state.

CIMB Research said this would in turn have a multiplier effect on Iskandar and boost demand for properties.

It added Ascendas Land's joint venture with UEM Land to develop a 519-acre industrial park could accelerate the booming development.

The research house pointed out that property developers continue to provide the best exposure to Iskandar but plantation companies, such as Kulim and Genting Plantations; oil and gas companies, such as Dialog, as well as contractors, such as Benalec were some of the beneficiaries of the advancement there.

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