Property developers are making a beeline to increase their land banks in Johor, spurred by the rapid growth of the Iskandar Development Region (IDR).

Industry players and analysts expect prices in Malaysia's Southern Gateway to continue rising - although marginally at present - due to demand as well as the high costs of building materials.  Nevertheless, it is commonly opined that it will take some time before prices of real estate and land in Johor will rival those in Kuala Lumpur.

Mah Sing Group Bhd chief Datuk Leong Hoy Kum said its three existing projects in Johor have enjoyed brisk sales since the IDR's launch, with prices of properties in prime locations in Johor Bahru having increased by about five to 10 per cent. The company recently bought 24ha in Johor Bahru for RM21 million to develop a new township, called Sri Pulai Perdana 2.

Another player betting on Johor is Tradewinds Corp Bhd, owned by Tan Sri Syed Mokhtar Al-Bukhary. The company is buying 363ha in Bandar Nusajaya for RM145 million.

Echoing similar sentiments is Datuk Yap Suan Chee, who control the Melati Ehsan Group.  Yap notes that real estate sales in the IDR have picked up by more than 20 per cent, and revealed that Melati Ehsan intends to increase its land bank in the IDR. The company is also looking to collaborate with landowners, to develop properties together.

Melati Ehsan is currently pursuing its maiden venture in Johor - Taman Ehsan Jaya - located within the IDR, in a partnership with landowner TPPT Sdn Bhd, a unit of Bank Negara Malaysia. This RM850 million joint-venture involves building 5,000 shoplots, medium-cost houses and low-cost apartments over 122ha. To-date, half of it has been completed, for RM400 million.