HomeISKANDAR Investment Bhd (IIB) is changing its strategies to drive investment into Iskandar Malaysia in view of the changing global economic landscape. Khazanah Nasional Bhd has a 60% stake in IIB with the Employees Provident Fund (EPF) and Kumpulan Prasarana Rakyat Johor (KPRJ) each holding a 20% equity.
President and chief executive officer Arlida Ariff talks about IIB’s role.
SBW: How would you rate IIB success over the last three years in attracting investment into Iskandar?
Arlida: We have progressed quite well despite the global economic slowdown.
We do have the capacity in terms of financial resources with the strong backing from Khazanah, EPF and KPJ and the manpower resources to proceed with our agenda.
Last year, we signed two new agreements – the first, is a joint-venture project with WCT Bhd to develop 1Medini (the first residential development in Medini.) The other one is with Marlborough College from Britain to set up a private college at our EduCity catering for local and international students between the ages of five and 18 from the region. 
Construction work on both with total gross development value (GDV) of RM650mil starts next month and both projects are scheduled for completion within the next two to three years. This is WCT’s first foray into Johor.
WCT is strong in construction in Selangor but not in development, so this is something new to them. We hope our partnership with the company will open doors of opportunities for us to work together with other local companies which are not in Iskandar yet. IIB is looking for both foreign and local investors to contribute to the success of Iskandar.
The frequent change of the Iskandar Regional Development Authority (Irda) CEO within three years lends a wrong impression to local and foreign investors, don’t you think?
An organisation is larger than the individual. Shareholders of Iskandar have to work closely with Irda as there are other economic growth regions in Malaysia and in other parts of the world that we are competing with to attract investors. It is not an easy task. Development is bigger than a person, discerning investors don’t care who the person is. They want good returns. That is the objective of Iskandar.
What are your plans for 2010?
We will announce joint-venture projects with new partners this year. Our focus will be closer to home. We are looking at countries in Southeast Asia – Singapore. Indonesia, China and India. Investors from these countries could become our partners in development projects or they could be buyers of our residential and commercial properties, or tenants for the retail project. We are keeping our options open.
We will still look at investors from Europe and the Middle East. Money can come from everywhere. We are a strategic developer and our main role is to drive commercial initiatives within the 2,217 sq km in Iskandar via joint venture or contribution of land. But, whatever investments we bring into Iskandar have to benefit the state and country.
Prospects are good in education, leisure, tourism and health services, especially education and health, as these are two segments that are least affected during an economic crisis.
We have EduCity with institutions to cater for education needs from primary up to university level in the fields of medicine, hospitality, engineering and maritime. For leisure and tourism, there are Legoland in Medini and the Indoor Theme Park @ Puteri Harbour opening in 2012.
We hope to bring in new retail brands.
As a Khazanah-backed entity, do you think that IIB is in a better position to attract investors to Iskandar?
Yes, but we have to prove that we are able to perform and deliver. Being a Khazanah-backed entity does not mean we have the luxury of doing work at our own whims and fancy. We are still answerable to the Government and our shareholders. We are actually responsible to all Malaysians. Iskandar is a national interest project and the first economic corridor to be launched in the country.
Our main asset is our land bank; currently we have about 1,618.74ha, mostly in Nusajaya which we have not developed.
We have already committed about 902.44ha for Medini of which 26.30ha is for Legoland and 1.25ha for WCT’s 1Medini, and about 1,200ha for Iskandar Waterfront Development, a joint-venture waterfront project with Danga Bay and KPRJ.
Apart from the property development, we are going to set up a unit this year to provide ancillary support services for property management, IT services, educational, tourism and environmental.
We don’t just want to develop a piece of land and hand over the project on completion. We want to ensure our projects are well maintained and managed in years to come, especially in 2012 when Legoland and NUMed @ EduCity are completed and operational.
What are the things you will consider before embarking on a project with an investor?
We will do a feasibility study to see whether there is market for such products or services and its viability.There is no point of having a good master plan but no software or necessary resources to translate the project into reality.
Another thing is the partnership and what they have to offer. When we started EduCity, there were other universities that wanted to set up their medical faculty here. We chose Britain’s Newcastle University. Apart from being among the top five medical universities in Britain, a survey by graduating doctors rated the university among the top three in preparing them to work in the real world.
The university is bringing 20 personnel to Iskandar in the initial years of operations as Malaysia doesn’t have enough lecturers and professionals in the medical services to train undergraduates. The same goes for the setting up of a specialist medical centre in Danga Bay Waterfront Development precinct. We want to have an with a strong brand name to run it. Under the Danga Bay Waterfront masterplan, residents will total more than 60, 000 and when you reach the 25,000 mark, you need a medical facility. Public hospital Sultanah Aminah is nearby but we also need a private medical centre and one name that pops up is KPJ Healthcare Bhd. Another key point is funding. No matter how viable the projects are, we will only proceed with partners who can put us in a good position to get funding. (zaza@thestar.com.my/23011010)