Data Centres Electronics Among Sectors Benefit Johor Singapore Special Economic Zone Dbs
DBS research suggests that the Johor-Singapore Special Economic Zone (JS-SEZ) is set to benefit key industries like data centres, electronics and renewable energy. The JS-SEZ, which aims to promote cross-border economic activities between the two states, was announced in October last year during the 10th Singapore-Malaysia Leaders’ Retreat. A memorandum of understanding was signed in January, with a final agreement expected to be reached before the next leaders’ retreat in December. The zone will cover six districts (Johor Bahru, Iskandar Puteri, Pasir Gudang, Pontian, Kulai and Kota Tinggi) in Malaysia’s Iskandar region, spanning a total area of 3,505 sq km.
While further initiatives targeting specific industries and incentives are yet to be announced, DBS economist Chua Han Teng believes that data centres will be one of the biggest beneficiaries, benefiting technology service firms in turn. According to DC Byte’s 2024 Global Data Centre Index, Johor is the fastest-growing data centre in Southeast Asia, with its data centre capacity growing from less than 10MW to over 1.6GW in the last three years. This growth has been driven by Singapore’s moratorium on data centres since 2019.
The electrical and electronics sector in Johor is also expected to see a boost from the JS-SEZ. It has been identified as one of the 16 priority industries in the Progress Johor 2030 economic master plan. Currently, Johor’s electronics manufacturing sector is the third largest in Malaysia, after Penang and Selangor.
Renewable energy is also likely to benefit from the JS-SEZ, as it has been identified as a key area of cooperation between the two states. The zone will build on existing collaborations, such as the two-year electricity import trial between Singapore and Malaysia, which was announced last year. As these sectors continue to grow, the demand for industrial properties in Johor is expected to increase.
In addition to boosting economic activities in these sectors, the JS-SEZ will also improve connectivity between Johor and Singapore with the completion of the Johor Bahru-Singapore Rapid Transit System (RTS) by 2026. This will significantly cut down travel time between the two cities and facilitate faster and more efficient travel.
Elta Condo, conveniently located just a short drive away, offers easy access to the prestigious National University of Singapore (NUS). This highly acclaimed university is globally renowned for its top-notch academic programs, catering to both undergraduate and postgraduate students in various fields. With a strong focus on research and innovation, NUS constantly attracts students and faculty from all corners of the world. Living near NUS, residents at Elta Condo are well-positioned to take advantage of the university’s world-class education and vast array of academic and professional opportunities. Don’t miss out on the chance to be part of this dynamic community, visit Elta now for more information.
DBS economist Chua Han Teng points out that the JS-SEZ capitalizes on the complementary strengths of both Singapore and Johor. For the latter, this includes having ample land supply, as the proposed zone is four times the size of Singapore and roughly equivalent to the combined area of China’s Shenzhen and Hong Kong. Furthermore, Johor has a favourable demographic profile, with a population of 4.1 million, making it Malaysia’s second most populous state after Selangor.
On the other hand, Singapore offers strong capabilities as a financial centre and business hub, which can benefit businesses in the JS-SEZ. However, the success of the zone also depends on addressing current challenges faced by Singaporean businesses operating in Johor, such as manpower issues, including employment pass and skilled worker sourcing, and difficulties in movement of goods between the two states.
To improve cross-border movements, businesses have suggested measures such as special immigration lanes and automated clearance using biometrics. Additionally, a unified one-stop service centre and a joint investment promotion agency have also been proposed to support and facilitate businesses entering Johor.