“Singapore is short of space and short of labour. Iskandar is short of neither,” says Manu Bhaskaran, chief executive of economic and political analysts at Centennial Asia Advisors, outlining the mutual advantages of the Iskandar development for both Singapore and Malaysia. “Clearly you can benefit hugely from being located next to a dynamic, rapidly growing, but land and labour-constrained economy like Singapore.”

The state of Johor is the second most competitive location in Asia in fDi Magazine’s Asian Cities of the Future rankings for 2009/10 and as a result, Iskandar is attracting businesses from Singapore and from further afield. “I think Iskandar has tremendous potential. If you look at its competitiveness as a manufacturing hub, it is one of the most cost-effective places in the world,” says Mr Bhaskaran.

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Pulling in business

Some 250 Singaporean small and medium-sized enterprises have so far made Iskandar Malaysia their home, drawn by low costs compared with neighbouring Singapore. Their combined turnover is conservatively estimated at about $140m and their investment has created about 6000 new jobs.

Malaysia and Singapore are discussing how they can work together more closely on the Iskandar project. A working group is studying the feasibility of a joint, iconic economic project in Iskandar which would showcase the commitment of both countries to build a strong, productive and enduring relationship. In addition, they will work to identify possible tourism products that can be jointly developed.

“With the current economic slowdown, it is even more critical for Malaysia and Singapore to foster closer bilateral co-operation. We can leverage each other’s strengths and jointly enhance the competitiveness of both regions in attracting global capital, businesses, talents and tourists,” says Mah Bow Tan, Singapore minister for national development.

The two countries are also working together on immigration issues and are running a pilot scheme that will give frequent travellers from Singapore to Iskandar fast-track clearance. This will make life more straightforward for the growing number of Singaporeans who are choosing to invest in property in Iskandar. John Nordmann, group operations director for private investment company, the Profitable Group, says: “Singaporean interest in Iskandar real estate is very strong. Initially people were looking for investment, but increasingly I detect a wave of people looking for somewhere to think about retirement. The one thing Iskandar offers that Singapore doesn’t is space – and gardens. People are thinking this is a better, more relaxed lifestyle.”

Affordable lifestyle

Price is also an issue, as Raj Chotrani, a Singaporean who has bought two properties in East Ledang explains: “ You get a very good standard of living for a very affordable price – about one-tenth of the price of similar property in Singapore.”

He adds that further development of Iskandar will enhance his investment. “As Iskandar becomes more developed and more integrated with the Singaporean economy, the attraction for Singaporeans and foreigners to settle here increases. Newcastle University is coming and also Legoland, so we’ll see more economic activity and rental opportunities as well as capital appreciation.”