AS Malaysia’s third largest gross domestic product (GDP) contributor, RHB Research has no qualms that this is possible as Johor stands out with its strategic location, advanced infrastructure and a diverse economic landscape that includes robust manufacturing activities and a strong services sector.

Moreover, this is backed the government-led catalytic developments as well as influx of foreign and domestic direct investments (FDIs/DDIs) that are able to lift the construction, data centre, energy, petrochemicals, industrial, tourism sectors in addition to a positive spill over to the property market.

“We see robust growth driven by two high-impact projects: the Johor-Singapore Special Economic Zone (JS-SEZ) and the Special Financial Zone (SFZ) in Forest City,” projected RHB Research in its Invest Johor 2024 thematic note.

“The Johor Bahru-Singapore Rapid Transit System (RTS) Link project which is a catalytic project that will boost connectivity between the two countries is 77.6% completed as of May 2024 and remains on track to begin operations by early 2027.”

RHB Research deemed the RTS Link as a game changer as increased cross-border traffic and the powerful “SGD (Singapore dollar) factor” should benefit the local real estate sector, including housing, retail, and hospitality.

“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,” envisages the research house.

“Major developers remain confident on the long-term outlook with Johor continuing to be an important market.”

As for the sister construction centre, RHB Research revealed that Johor’s value of construction work done on a quarterly basis reached RM4.8 bil in 1Q 2024 - the highest in 19 quarters and the second largest among all Malaysia states.

“Concurrently, Johor saw RM20.5 bil worth of construction projects awarded as of early August 2024, just behind Selangor which recorded RM25.5 bil during the same period,” observed the research house.

“With favourable labour conditions and more manageable building material price trends, contractors are in a sweet spot to leverage on Johor’s infrastructure revolution.”

Elsewhere, RHB Research further expects the potential resurrection of the Kuala Lumpur-Singapore High Speed Rail (HSR) to further expand the greater Johor hinterland in the decades ahead.

MyHSR Corporation, the government-owned entity overseeing the HSR’s development, had reportedly received concept proposals from seven local and international consortia by its Jan 15 deadline which is part of the request-for-information (RFI) exercise for the HSR.

It was reported that three consortiums had been shortlisted for the project. They were (i) YTL Construction-SIPP Rail; (ii) Berjaya Rail-Keretapi Tanah Melayu Bhd-Malaysian Resources Corp (MRCB)-IJM Construction; and (iii) a Chinese consortium led by state-owned China Railway Construction.

Above all else, the recent deluge of new data centre (DC) investments has also seen Johor capture nearly 2GW of new capacity helped by restrictions on new DC builds in Singapore. - Aug 13, 2024

https://focusmalaysia.my/can-johor-transition-into-a-supercharged-growth-phase-potentially-malaysias-next-growth-engine/