The past 12 months have been good ones for the most established and developed of Malaysia’s growth corridors, Iskandar Malaysia (IM). Indeed, hitting some key growth targets in 2011-12, IM has been busy consolidating its standing as one of the fastest-growing regional development projects in the country.

Launched as part of the Ninth Malaysia Plan in 2006, IM is also benefitting from continued government investment support for the region it covers, at the southern tip of Peninsular Malaysia, in the state of Johor. More than 30% of all investment projects under the Economic Transformation Programme (ETP) are located in this state, as it seeks to build itself into a competitor to neighbouring Singapore.

COUNTDOWN TO 2025: At 221,634 ha of land, the region covered by IM includes the new administrative capital of Nusajaya, the city of Johor Bahru and Johor-Bahru district, along with parts of the neighbouring district of Pontian. Co-chaired by the prime minister and the chief minister of Johor, and containing representatives of federal ministries, local agencies and the State Planning Committee, the Iskandar Regional Development Authority (IRDA) is the major implementation agency for the corridor.

Three other bodies are also key members of the authority: Khazanah Nasional, the government’s strategic investment fund; the Johor Corporation, Johor state’s investment corporation; and the Iskandar Investment Board, an investment holding company that works in close partnership with the IRDA.

On the ground, meanwhile, IM is parcelled into five distinct focal points, or flagship zones, lettered A-E. These are Johor Bahru City, Nusajaya, the Western Gate Development, the Eastern Gate Development and Senai-Skudai. With the exception of Senai-Skudai in the north of IM, all the zones skirt Johor’s southern border, facing Singapore – a significant geographic orientation. Each zone is focused on building on particular existing economic clusters as well as developing and diversifying targeted growth sectors, which include educational institutions, creative industries, leisure and tourism, and financial, health care, electrical and electronics (E&E), logistics services, as will as petrochemicals and oleo-chemicals, and food and agricultural processing.

The IRDA is currently implementing the region’s Comprehensive Development Plan, which runs from 2006 to 2025. By 2025 IM should have a population of around 3m people, with 1.46m new jobs created. Cumulative investment over the period should stand at RM383bn ($12.4bn) after an average annual GDP growth of 8%.

TOTAL INVESTMENT: IM has been well on target, too. According to the IRDA, as of the end of financial year 2011, an initial RM47bn ($15.2bn) investment goal had been achieved, with total committed domestic and foreign investments since 2006 amounting to more than RM70bn ($22.6bn). IM then went on to secure RM10.67bn ($3.4bn) in new committed investments during the first half of 2012. This number rose from a foundation of RM2.78bn ($896.8m) in recorded total cumulative committed investments in the first quarter of 2012. The IRDA is targeting total cumulative investments of RM100bn ($32.3bn) by the end of 2012, CEO Ismail Ibrahim told reporters in August that year.

This now seems achievable, as IRDA figures show that between IM’s launch in 2006 and the end of the first half of 2012 total cumulative committed investments in IM had reached RM95.45bn ($30.8bn), 43% of which had been realised. Domestic investments constituted 62% (RM58.95bn, $19bn) of this total, with the remaining 38% (RM36.5bn, $11.8bn) of foreign investment led by Asian commitments. Asia had contributed 42% of foreign investment, with Europe close behind at 40% and the Middle East at 14%.

Since 2006 the manufacturing and property sectors have been the heaviest hitters, recording cumulative committed investments of RM32.71bn ($10.6bn) and RM29.8bn ($9.6bn), respectively. Over the same period utilities brought in RM9.52bn ($3.1bn), the government sector RM7.31bn ($2.4bn), petrochemicals RM5.1bn ($1.6bn), ports and logistics RM3.74bn ($1.2bn), tourism RM2.03bn ($654.9m), health care RM1.6bn ($516.2m) and education RM1.55bn ($500m). More recently, the region’s investments have come in the form of new universities and health care centres, as well as plans to begin refining petrochemicals.

IM has persuaded multinational corporations such as Citigroup and HSBC to locate offices in the region, and Marlborough College Malaysia, the University of Southampton Malaysia campus and Asia’s first Legoland theme park all opened in IM in autumn 2012.

NEW JOBS: Since 2006 more than 20,000 jobs have been created in the corridor, according to the IRDA’s latest five-year progress report. Of these, nearly 10,000 were in the E&E sector, more than 6000 were in leisure, and almost 6000 in tourism and education. Significant numbers of jobs were also created in the oil and gas, biotechnology and retail sectors.

Looking ahead, during the period 2011-15, officials project IM’s employment opportunities to more than double to an estimated 55,730 jobs. The bulk of these new jobs will be generated by the creative sector, with projects such as Pinewood Iskandar Malaysia Studios and MSC Cyberport expected to open up 18,000 new employment opportunities.

JOHOR BAHRU CITY: Home to more than 1m people and the entry point for 60% of foreign tourists to Malaysia and 85% of visitors from Singapore, Johor Bahru City stands to benefit in many ways from its proximity to the Lion City. Connected to its neighbour by a causeway, Singaporean commuters stream over the border to take advantage of Johor-Bahru’s lower real estate prices, while Singaporean companies benefit from IM’s cheaper labour costs. Building on these competitive advantages, IM officials are planning coordinated growth with Singapore by building a large new Customs, immigration and quarantine (CIQ) complex and mass transit rail links with the city-state. It is anticipated that the plan to merge their CIQ complexes will significantly reduce the time it takes to clear immigration between the two territories. The cooperation on CIQ is also a symbolic gesture, showing the positive diplomatic relationship between Malaysia and Singapore. In 2011 the two governments resolved a dispute over the ownership of railway land in the latter. The resolution has opened avenues for more cooperation between Singapore and IM, such as recently announced plans by Singapore’s government to invest in a joint venture wellness centre at Gleneagles Hospital in Nusajaya.

Another development in Johor Bahru City that is catching the eyes of Singaporeans and Malaysians alike is the Danga Bay waterfront project. Managed by Iskandar Waterfront Holdings, plans for the estimated RM13bn ($4.2bn), 120-ha project at the bay outline the construction of an exclusive waterfront zone. There are designs for five themed commercial centres: the Venice, the Gateway, the Rivera, the Bund and the Fisherman’s Wharf – all likely to attract buyers from the increasingly crowded city-state next door.

NUSAJAYA: Meanwhile, situated west of Johor Bahru, Nusajaya is a development-ready site for an entirely new city. One of the largest property developments in Asia, Nusajaya incorporates 9712 ha of contiguous land and a wide variety of developments. By 2025 the city is expected to have a population of 500,000.

Eight signature projects are currently in various stages of development for Nusajaya. These include Medini, a mixed-use development that comprises Legoland Malaysia and Pinewood Iskandar Malaysia Studios; Kota Iskandar, a governmental administrative centre; and Puteri Harbour, a waterfront and marina development.

Education, health and accommodation will be catered for at Educity@Iskandar, a regional education centre; Afiat Healthpark will be devoted to traditional and conventional health care; and Nusajaya Residences will see the developments Horizon Hills, Ledang Heights and Nusa Idaman. The Southern Industrial and Logistics Cluster (SILC) is also under way, creating an environmentally sustainable industrial park, while the upscale International Destination Resort will feature theme and water parks, as well as five-star hotels, golf courses, a marina, and retail and dining outlets.

COMING ON-LINE: Many projects within these developments have reached completion. These include the first phase of Kota Iskandar, the Columbia Asia Hospital, the marinas at Puteri Harbour, a number of residential estates, and several factories operating at SILC. Indeed, SILC is a particular source of interest to investors. Home to Malaysia’s first dedicated biotechnology park, Bio-XC ell, in 2011, Indian pharmaceutical firm Biocon unveiled plans to invest RM500m ($161.3m) to build a manufacturing facility there – the first Biocon factory outside India. Scheduled to be fully operational by 2014, the facility will develop and manufacture biopharmaceutical products. Bio-XC ell has also secured investments from France and the US.

Educity@Iskandar, an entry point project (EPP) of the ETP’s education NKEA, is intended to make the country a key player in the international education market. Educity@Iskandar is thus aiming to become the region’s centre for higher learning by housing international universities, research and development (R&D) enterprises, residential areas, and conference and exhibition space. It is also intended to provide Malaysians with the opportunity to access affordable international education at home. Thus Raffles University Iskandar, Reading University Marlborough College, Raffles American School, Newcastle University Medicine Malaysia (NUM ed), Netherlands Maritime Institute of Technology (NMIT) and the Johan Cruyff Institute for Sports Studies (JCI) have all now set up there.

Looking to the future, Nusajaya’s key upcoming projects include the second phase of Kota Iskandar and the opening of the University of Southampton campus in Educity@Iskandar. Also coming are Pinewood Iskandar Malaysia Studios, Puteri Harbour indoor theme park and the Gleneagles Hospital in Medini Iskandar, which is being jointly developed by Khazanah Nasional and Singapore’s Temasek Holdings.

WESTERN & EASTERN GATES: Spanning an area of more than 12,000 ha west of Johor Bahru, the Western Gate Development is scheduled to become one of the country’s most important maritime centres, in addition to being the Malaysian terminus of the Second Link Expressway to Singapore. The Port of Tanjung Pelepas, now the 17th-busiest container port in the world, is located at the Western Gate, along with a free trade zone that was ranked by The Financial Times fourth best in the world in the financial paper’s “Global Free Zones of the Future 2012/13” report. Other key projects in this development include the Seaport World Wide Petrochemical Park, ATT Tanjung Bin Power Plant, ATT Tanjung Bin Oil and Petrochemical Terminal, the Asia Petroleum Hub and several Ramsar (wetlands) sites.

The Eastern Gate Development comprises the ports of Johor, Tanjung Langsat and Pasir Gudang; the industrial complexes at Tanjung Langsat and Pasir Gudang; and mixed residential developments over a total area of 31,132 ha. It also has the world’s largest concentration of palm oil-refining industries and downstream activities. Its economic development focus is thus on industries such as oleochemicals, chemicals and foodstuffs, in addition to E&E, engineering industries, logistics, ports and warehousing.

Current and ongoing projects in the Eastern Gate include the “City of Knowledge”, Bandar Seri Alam; two specialist hospitals, Pasir Gudang and Regency; the 77-km Senai-Desaru Expressway; the Majlis Perbandaran Pasir Gudang administrative complex; and upgrades to the port of Tanjung Langsat.

SENAI-SKUDAI: The final flagship zone is Senai-Skudai and Senai International Airport, a 30-minute drive from Johor-Bahru and 30 km from Singapore. Here officials envision transforming the existing Senai International Airport into the region’s second-largest air hub, handling overflow from Singapore’s Changi Airport as the region’s population swells over the next decade.

As it grows, Senai-Skudai is also expected to become an international logistics centre, spurring growth and investments in highlighted sectors such as E&E, education, engineering and tourism. Major projects here include the Senai Hi-Tech Park, Johor Premium Outlets – an NKEA EPP – and MSC Cyberport City. In the future, this area is also in line to serve as a centre for agro- and food processing, ICT and creative industries.

In terms of infrastructure, the Indahpura Interchange currently serves the new Kulai Administration Centre, Johor Premium Outlets and MSC Cyberport City. As the interchange is expanded, it will connect up with the Second Link Expressway and the North-South Expressway.

RAPID GROWTH: Over the next two years, Dialog Group is to build a regional oil storage and trading centre near Pengerang on the southern tip of the peninsula. This will capitalise on a 24-metre-deep channel close offshore able to handle the largest of the world’s crude oil tankers and lying much closer to the coast than Singapore’s parking distance for large vessels of 8-10 km. National oil and gas company Petronas also announced in May 2012 plans to construct a $20bn, 2000-ha Refinery and Petrochemical Integrated Development (RAPID) in the same area. These developments will transform the agricultural and fishing communities that currently make up this coast, creating an international-standard refining and petrochemical centre. The Dialog Group’s centre and the RAPID complex together should create thousands of supporting jobs in subsidiary oil- and gas-related services. Pengerang’s development as a petro hub is scheduled for completion by 2016-17.

IM has many competitive advantages, perhaps the most prominent of which is its location next to Singapore and its symbiotic relationship with the Lion City. With the corridor’s two ports straddling the Straits of Melaka and the South China Sea, alongside planned transit and Customs link-ups with Singapore, travel and trade between the two nations should only get easier and faster. Key offerings such as Legoland Malaysia, the Austin Heights Water Theme Park and the Puteri Harbour Family Entertainment Centre are all set to open in 2012, which is when the first major jump in visitor numbers to IM is expected. Indeed, IM officials are targeting 7m tourist arrivals a year by 2020. If IM can continue getting the mix of expansion and execution right, all the signs indicate a bright future for the corridor.