Johor-Singapore SEZ to spur investments from mainland China, Taiwan, UOB says

Johor has already secured potential investments totalling around US$380 million from China earlier this year, with more likely to pour in to take advantage of tax incentives in the JS-SEZ, according to Lim Lay Wah, a managing director at Singapore bank UOB.

“We see the Taiwanese, not just China plus one … also want to tap on that as well,” Lim said, referring to the investment strategy where firms run parallel operations in China and a second country to diversify sources of supply and production.

UOB’s Lim said the governments on both sides have been sending the right signals to investors, especially Malaysia’s recent pledge to pump in 120 billion ringgit (US$25.3 million) in direct domestic investments across the country by local pension funds and institutional investors.

“That’s very powerful because you are telling investors that we want to make sure your investments are safe … but at the same time we also put our anchor capital to support the synergy,” she said on Wednesday.

The special economic zone is also expected to drive more demand from the data centre sector, as industry players look to set up resource-intensive facilities in locations that can provide sufficient land and power.

Johor is well-positioned in this regard, with a large land bank and surplus power, all close to Singapore. Many multinational firms like the Princeton Digital Group (PDG), a leading developer and operator of internet infrastructure, are headquartered there.

“Those factors make Johor already a viable data centre [hub], even before the special economic zone started taking shape. The special economic zone will definitely give further impetus to our business,” said Rangnath Salgame, PDG chairman and chief executive officer.

More than 40 data