By Khairul Khalid
China’s e-commerce giant Alibaba is rumoured to be planning to invest in a logistics hub in the Iskandar region in Johor, according to a property sector report by UOB Kay Hian (UOBKH).
“Alibaba is rumoured to be planning to develop a logistics hub in the Pasir Gudang/Kota Masai area, near Johor Port,” said UOBKH. However, there are still no details of how much Alibaba plans to invest or when this project may take off.
UOBKH also added that Johor-based Tiong Nam Logistics would benefit should Alibaba go ahead with the rumoured investment plan.
Alibaba was founded by entrepreneur Jack Ma, who is now executive chairman of the company and one of the richest men in the world. The company has a market capitalisation of about US$150 billion (RM660.8 billion). It runs two retail sites in China and provides payments and operation software to merchants and consumers.
The UOBKH report cited Alibaba as one of three multinational corporations that may announce large investments in the Iskandar region soon. The other two are the opening of a data storage facility by a global IT firm and the development of a new world-class theme park by an Australian operator. Both companies are not named in the report.
According to the Iskandar Regional Development Authority (IRDA), Iskandar Malaysia has received over RM173 billion in investments as of June 2015, up from RM158 billion in 2014. Sixty one percent of these investments came from local investors, while 39% were from foreign investors.
“Of the committed investments, RM88 billion (50%) had been realised with the bulk from the manufacturing and real estate industries. This would help facilitate population and economic growth within these sectors.
“Also, the entry of the manufacturing sector would further boost demand for industrial properties, which is the key focus of major developers under our coverage currently,” said UOBKH.
The IRDA is targeting to attract RM30 billion in new investments, especially in the tourism and healthcare sectors. It also believes that the high-speed rail project between Kuala Lumpur and Singapore and construction of the rail transit system linking Singapore and Johore, both expected to be completed in by 2020, will further boost Iskandar’s prospects.
UOBKH maintained its “market weight” call on the property sector. It believes that the sector’s performance has been dampened by the tightening measures and the anticipated consumption slowdown due to the various reductions in government subsidies.
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