We were nosing around Johor yesterday at the Johor Premium Outlet (JPO) at Kulaijaya, JB and also Danga Bay. From the Sungei Besi Toll to JB is just under three hours driving time, on the Mahathir Mohamed Expressway. Thank you Ayahanda Tun Dr Mahathir Mohamed.
The JPO is located in Kulaijaya - you drive through kilometres of oil palm plantations which have the 'Genting Plantations' markers on them. Then suddenly you come to the Johor Premium Outlet complex - an American style strip mall with 330,000 sf of space built on 17.8 ha of formerly oil palm plantation. There are four long buildings or strip malls built one behind the other. It is a bit of walking to see everything.

The Johor Premium Outlet. Io sono qui.
This is a 50:50 JV between the Genting Group and a US retail giant which specialises in premium brands. Considering that ground breaking only took place in August, 2010 the 330,000 sf retail complex is up and running in just over 12 months - a fantastic achievement.
The Genting Group have plenty of experience in developing out of the way places from jungle to casinos. Or from oil palm plantations to premier retail malls.
Thus far the JPO is a runaway success. Many of the major brand names have opened up shop at the JPO. Salvatore Ferragamo, Nike, Canali, Guess, Burberry's, Timberland, Samsonite and many more. They opened in time for the Christmas shopping season. Locals and Singaporeans have been coming to the JPO in droves. Some of the shops are actually sold out - their shelves were empty. The staff said they restock once a week every Thursday. If you are a retailer, this is real 'show off' talk. The business is great. The JPO is a Jackpot in Johor.
The prices are cheap for branded goods. Raoul shirt's were on sale for RM230. My son told me the same shirt is on sale in Bangsar for about RM500. (I bought a RM50 shirt from another outlet). Clark shoes are available for RM200+.
However, one shop selling ladies accessories (also found in Mid Valley Mega Mall) had doubled their KL prices and then given a 50% discount. So that was not very honest lah - if you ask me.
Here is the main reason the JPO will continue to be a success. The picture here shows Singapore registered cars in the parking lot. All the five cars in this picture were Singapore cars. There were hundreds of them. The Singapore Dollar is now worth RM2.45. So an RM230 Raoul shirt is less than S$94.00.
Plus Kulaijaya is about 30 mins from the Second Link to Tuas in Singapore. Malaysians used to travel to Orchard Road in Singapore to shop. Now Singaporeans are driving to Johor to shop. They also drive to Malacca to stock up on toilet paper and other groceries.
This is going to be quite inevitable. Being so close to Singapore. There is no way we can avoid the spillover business from Singapore to Malaysia. This means that property prices will shoot up even higher in Johor. This is where the Genting Group is sitting on a huge goldmine as well - thousands of acres of land within minutes of Singapore. They must have bought this land ages ago at a few hundred Ringgit or a few thousand Ringit per acre. The land around the JPO is now possibly priced and sold by the square feet (not in acres).
It also means better business opportunities and more job opportunities. We have to be sensible about this and open up more space for such business. Throughout the JPO the shop staff (local girls and boys) spoke good English and were 'on the ball' - they seemed to know their jobs well. To me this is quite unusual. Big Dog who hails from Johor always says the Johor people are more sophisticated. Good for the Johoreans.
The JPO project cost about RM150 million. It is projected to bring in about 4.0 million shoppers a year - mostly from Singapore. Many of these 4.0 million visitors will be repeat customers, who will come here to spend money in our country (as opposed to say spending it in Orchard Road). If each one of them spends RM300.0 at the JPO that works out to RM1.2 Billion a year. They may still eat seafood in JB, fill up their tanks at the gas stations and maybe even buy toilet paper in Malacca. So bringing in 4.0 million visitors at an investment cost of RM150.0 million is none too shabby at all.
Someday I will talk a little bit more about "value economics" - an idea I first mentioned in my first book 'To Digress A Little'. (I am not trained in Economics). It basically means "usefulness" - is it of ultimate good use for mankind. There is some subjectivity involved. And it also means dont hang out with the riff raff. Activity which cannot create new wealth that is beneficial to mankind is riff raff too. Making bombs may generate wealth but it is of no beneficial use to mankind.
We also went by Danga Bay. Danga Bay has huge development plans spread over 450 acres (25 km of sea front). This is the cornerstone of the Iskandar Development Region.
The marina at Danga Bay is operational. The shop offices at Danga Walk are well occupied. An apartment block has been built and some houses have also been constructed. But filling up 450 acres with skyscrapers in the blink of an eye is going to take some effort (I am referring to the larger Danga Bay development concept). Not that it cannot be done. It can be done and it should be done. Then Danga Bay can even rival Singapore for commerce. This is Danga Walk here. Shops and shop offices.
Some Minister with Arab connections (the "hoods" from the Islamic brotherhood) wanted to bring in tons of Arab money into the country - which is sometimes ill gotten as well. They even invited the Iranians to invest. Well the Arab money is not coming into Danga Bay (and maybe also into 1MDB in Sungei Besi). I actually consider that good news. With all the mess going on in the Arab countries, all the Oos of the Oo Ba Doos are holding their money closer to their chests.
These folks were never reliable in the first place. With things going the way they are in the Arab countries, it is doubtful if these "in the money" people will still be around tomorrow. Sooner or later the Arab Spring is bound to spring onto the remaining feudal oil kingdoms as well. Just wait and see. If your billions are gained unjustly by oppressing your own people, your head will not last long on your shoulders. You are riff raff. And these are the type of investors that you have been courting?
Anyway folks, here is some news from May 2010 : "Abdullah (Badawi) said the government had spent RM244.3 billion on the development in five corridors concerned and expected funds for the remaining 25 per cent of its commitment for the development to be spent under the 10th Malaysia Plan."
Tun Dr Mahathir has always asked what happened to over RM200.0 billion that disappeared under the Badawi regime. Well Badawi says his gomen spent over RM244 billion already just in the five corridors.
So how was the money spent? Here is some indication from the front page of today's Star.
1. Duo to be charged in graft probe of Iskandar company’s RM2bil package
KUALA LUMPUR: Two former directors of Iskandar Investment Berhad have been arrested for alleged graft as the Malaysian Anti-Corruption Commission stepped up its investigation of the company's RM2bil package.
The duo, in their 40s, are expected to be charged in the Johor Baru magistrate's court today with corruption involving about RM5mil in connection with the construction of a highway and a boarding school in the Iskandar region.
The RM124mil highway and RM40.8mil school are part of the 3B package and the two were chief executive officers of IIB subsidiaries involved in the projects.
2. Ex-senior VP of Iskandar subsidiary pleads guilty to graft charge
JOHOR BARU: A former senior vice-president of an Iskandar Investment Berhad (IIB) subsidiary was fined RM20,000, in default two months' jail, after he pleaded guilty to a charge of corruption at a Sessions court here Wednesday.
The 51-year-old man's identity has been withheld as he is assisting the Malaysian Anti-Corruption Commission in several other cases involving the IIB.
So that is where some of the money went. Folks, I think these guys are the ikan bilis, they behaved like monkeys and got peanuts. The gorrillas managed to get away with the entire banana plantation. Strangely they are still in power - although feeling strangely itchier around their necks.
Just how much business has been generated since the Gomen spent RM244 billion in the five development corridors? The JPO was built in the middle of oil palm plantations at a cost of RM150 million and it is already a sell out business. They expect 4.0 million shoppers to come by every year. Badawi spent RM244.0 billion and what has he got to show?
I would like "to digress a little". The development corridors were launched by the Abdullah Badawi regime in 2006 : "The first to be launched, in 2006, was the South Johor Development Region, otherwise known as Iskandar Development Region or IDR, in the state of Johor."
Well folks, even before 2006 a book was already published (in 2005) by a local author which detailed the idea for the economic development corridors. The author's ideas and suggestions were quite sound. In Chapter 9 titled "Here Is One Grand Economic Plan" (pg 166) the author says,
"We also need to increase growth corridors throughout the country. Todate there is only the Klang Valley growth corridor which generates much of the business, commerce and industry for the country.
The Penang Island, Seberang Jaya - Kulim growth area has been stunted. The Johor Bharu growth area is also not reaching its full potential. We need to create wealthy pockets of growth throughout the country with large population centers in excess of 2.0 million people each that can sustain growth'.
If we can create a few more Klang Valley type urban sprawls throughout Malaysia then our growth will be phenomenal and not subject to the ups and downs of the world economy or commodity markets"
The author then proceeded to identify possible growth corridors :
i. The Ipoh - Sungai Siput area already has over 750,000 people
ii. There is potential to develop further the Melaka - Air Keroh area or a new Melaka - Sungai Udang growth corridor along the beautiful Melaka coastline. Imagine public piers, yacht clubs and marina coves dotting the Melaka coastline.
iii. The Kuantan-Gambang area as well as a Johor Bharu corridor hold much potential.
The main focus should be on population growth first to populate each of these areas with at least 2.0 million people.
Here are two pictures of a marina at Danga Bay. This is what the author envisioned in his book.
However in his book the author forgot to mention two prerequsites to make the development corridors succesful - the first is honesty (meaning no corruption). And saya malas nak sebut the second requirement (maybe you can fill in the blank).
Here is a picture of the book's cover and author's name.

They never even sent me a thank you note for my ideas. Kurang asam betul.