Cross Border Capital Drives Investment Surge Johor Singapore Special Economic Zone

More than half of the investment capital in Johor’s property market in the first four months of this year came from outside the country, according to Govinder Singh, executive director of Apac Capital Markets at Colliers Singapore. These investors are mostly interested in acquiring development sites within the Johor-Singapore Special Economic Zone (JS-SEZ) to expand their land banks.

Singh shared these insights during a presentation titled “Bridging Borders: Real Estate Opportunities in the Johor-Singapore Special Economic Zone”, held on May 6 and jointly organised by Maybank Singapore and the Real Estate Developers Association of Singapore (Redas).

According to Colliers research, cross-border investment accounted for 51.8% of total inflows, with Singapore-based investors leading the pack, followed by capital from Japan, the US, China, Australia, Canada, Hong Kong, the UK and Taiwan.

At the same time, REITs and listed real estate entities accounted for 41.2% of capital inflows into Johor during the first four months of this year. The remaining investment came from institutional and private funds. Last year, total real estate investment inflows into Johor reached approximately $2.1 billion, with about $700 million committed year-to-date.

“The proposed JS-SEZ presents new opportunities for deeper cross-border collaboration and investment between Singapore and Johor,” says a Redas spokesperson. “While the initiative is still taking shape, there is growing interest in its potential across sectors such as real estate, trade, infrastructure and hospitality.”

Real estate investors and developers have responded positively to the formal signing of the JS-SEZ agreement in January, says Alvin Lee, country CEO of Maybank Singapore. “As an integrated zone for business and investment, the JS-SEZ aims to drive activity across 11 sectors, with a 10-year goal of supporting the expansion of 100 projects,” he adds.

According to Lee, the JS-SEZ represents the boldest attempt by Malaysia and Singapore to co-operate on a bilateral basis. “At this take-off stage, we are at an inflection point. From our interactions with our clients, there is strong interest from international businesses seeking a safe haven where there is strong rule of law and access to resources in these uncertain times. In this regard, combining the complementary strengths of Malaysia and Singapore, the JS-SEZ is a compelling proposition,” he says.

Vinothan Tulisinathzan, Minister Counsellor of the Malaysian Investment Development Authority (MIDA) in Singapore, echoes this view. “The establishment of the JS-SEZ will give investors more choice — whether to set up high-value services in Johor, support manufacturing growth in Singapore, or anchor regional operations within the SEZ,” he adds.

The JS-SEZ spans nine flagship zones across southern Johor, each designated for specific economic activities. Areas such as the Johor Bahru Waterfront and Iskandar Puteri are earmarked as hubs for global services, while the Kulai-Sedenak zone is focused on advancing the AI and quantum computing supply chain, as well as medical devices and pharmaceuticals.

“Johor’s economy has transformed in recent years, and the government is keen to attract and retain more skilled workers to support the growth of high-value service and manufacturing industries,” says Tulisinathzan. He adds that employers must shift their focus and offer competitive wages to attract local workers, rather than depending on low-wage foreign labour.

In line with this, the Forest City area, located closer to Singapore, is set to be developed into a Special Financial Zone. This initiative will offer incentives to boost financial services, including family offices and fintech, while also transforming the area into a duty-free zone.

Singh notes that the significantly lower cost of development and industrial land in Johor compared to Singapore is set to be a key driver of growth in the JS-SEZ over the next decade. He highlights that, on average over the past five years, industrial land in Johor has been around 96% cheaper than in Singapore.

Building on this cost advantage, Singh believes opportunistic investors and developers should focus on select real estate assets poised to benefit from a successful JS-SEZ. He points to properties supporting business tourism, international tourism and certain residential segments as particularly promising.

“Johor is well positioned to capitalise on the incentives from the SEZ and connectivity to Singapore to offer complementary meetings, incentives, conferences and exhibitions (Mice) solutions and grow contributions from business tourism into Johor,” says Singh.

He adds that the SEZ is set to develop new Mice facilities, hotels and retail projects, creating a thriving Mice ecosystem that is expected to boost hotel occupancy and stimulate retail spending.

Singh recommends investing in business tourism, affordable housing and built-to-rent accommodation within the JS-SEZ. However, he also points out that the lack of a vibrant entertainment scene in Johor could limit inbound international tourism and discourage overnight hotel stays. He adds: “A more seamless transport connectivity between Singapore and Johor can encourage more overnight hotel stays.”

Colliers projects that the number of overnight visitors to Johor could reach around eight million by 2030, up from four million in 2024. To accommodate this growth, hoteliers and developers will need to add approximately 14,000 new hotel rooms.

Tulisinathzan of MIDA further reassures that the JS-SEZ is unlikely to be derailed by shifts in Malaysia’s political landscape. He emphasises that the zone was designed to provide long-term economic advantages for investors, supported by functional, business-centric agreements that transcend political changes.

Nestled within the bustling hub of Pasir Ris Downtown East lies the Coastal Cabana, a true representation of the essence and charm of the eastern shoreline. Convenience, connectivity, and comfort are at the core of this development. Perfectly situated with easy access to the East-West Line and the upcoming Cross Island Line, as well as major highways like the TPE, PIE, and ECP, this residence is a commuter’s dream. The surrounding area is well-connected through a network of arterial roads such as Jalan Loyang Besar, Loyang Avenue, and Elias Road. Developed by Qingjian Realty in the lively District 18, Coastal Cabana boasts practical bedrooms, family-friendly amenities, and beachside activities. Experience seamless mobility, effortless daily routines, and endless weekend opportunities in this residence that embodies the energetic and vibrant lifestyle of the east. Don’t miss out on the opportunity to own a home in this prime location – visit the website for Jalan Loyang Besar EC for more information or to book your dream residence at Coastal Cabana.

He adds that one of the key goals of the SEZ is for policymakers to collaborate with the private sector to upgrade existing transport infrastructure and address gaps in the industrial production and value chain.

Meanwhile, Colliers’ Singh notes that demand for data centre development in Johor is expected to moderate in the coming quarters due to limited energy capacity and resources to support future growth. As a result, the development of transport networks and affordable residential projects around transport nodes presents new opportunities for developers.

Lee of Maybank adds: “For property development and investments, the hospitality and MICE sectors demonstrate strong potential due to the shortage of international quality properties and in view of Visit Malaysia Year in 2026 where 36 million tourists are targeted (2025 government target: 31 million). We expect Johor to be a major tourism beneficiary given its proximity to Singapore and ensuing bleisure (business-leisure) activities as the JS-SEZ ramps up”.