KUALA LUMPUR: Iskandar Malaysia's next challenge is turning investment into sustainable growth, higher-value jobs and stronger local businesses, industry experts said.
The Johor economic corridor marks its 20th anniversary this year with RM525.26 billion in cumulative investments, surpassing its original RM383 billion target by RM142.26 billion.
Industry experts said the focus now is on building a more advanced industrial base, improving liveability and helping Malaysian companies secure a bigger role in regional and global supply chains.
Zerin Properties founder and chief executive officer Previndran Singhe said Iskandar Malaysia's investment performance reflected the sustained efforts of the Iskandar Regional Development Authority (IRDA) and the Johor government.
"This has been a long time coming, and I welcome it. When Iskandar was launched in 2006, plenty of people in our industry, myself included, wondered how long it would take to gain real traction, said Previndran who has more than 35 years of experience in the property industry,
"RM525 billion later, with over a million jobs created and household incomes more than doubled, the answer is clear. IRDA and the Johor government deserve the credit," he told Business Times.
However, he said the next phase would be more demanding, as attracting investment alone would not guarantee that Iskandar Malaysia became a compelling place to live, work and build businesses.
"Attracting capital is one thing. Building places people actually want to live in is another," he said.
Previndran said companies and skilled professionals increasingly considered quality of life alongside office costs, rental rates and other conventional investment factors when deciding where to establish operations or build careers.
A young engineer or regional executive choosing between Johor and another regional destination would also consider access to parks, cafés, cultural activities, reliable public transport and shorter commuting times, he said.
"Investors follow talent, and talent goes where life is good. Those everyday things matter more than any brochure," he said.
He said Iskandar Malaysia already had considerable advantages, including its waterfront, marinas, the historic character of Johor Bahru's old town, green spaces and a young population.
However, better public transport, more coordinated urban planning and stronger community amenities would be necessary to make the region more attractive to residents and investors over the long term.
The Johor Bahru-Singapore Rapid Transit System (RTS) Link is expected to transform cross-border mobility, but its benefits would depend partly on how effectively commuters could connect to destinations beyond the rail stations.
"The RTS Link will change how people move between Johor Baru and Singapore, but if you step off the train and the only way forward is a Grab or your own car, we have missed the point," Previndran said, calling for reliable bus services, a proper rapid transit network, and shaded walkways and cycling paths linking townships.
He also highlighted the need for closer coordination among local authorities, particularly in planning approvals, infrastructure delivery and township management.
More vibrant neighbourhoods, with independent cafés, bookshops, small businesses, weekend markets and cultural activities, could help give Johor Bahru a stronger urban identity and encourage more visitors from Singapore to spend time in the city beyond shopping and refuelling, he said.
Sustainability should also be incorporated into future development through greener buildings, more trees, improved drainage and inclusive communities designed to serve different generations.
"Iskandar has shown the world it can bring in investment. The next 20 years will be about making it a place people are proud to call home," he said.
Olive Tree Property Consultants founder and chief executive officer Samuel Tan said Iskandar Malaysia's next phase of growth would depend on how effectively it leveraged its strategic location and the complementary strengths of Johor and Singapore, particularly through the Johor-Singapore Special Economic Zone (JS-SEZ).
The JS-SEZ aims to strengthen economic integration between the two jurisdictions by combining Johor's land availability, industrial capacity, talent pool and competitive operating costs with Singapore's international capital, technology, business networks and access to global markets.
The zone attracted RM76.98 billion in approved investments in 2025, highlighting Johor's appeal as a complementary base for companies seeking to expand their regional operations.
Tan said the opportunity was significant, but realising its full potential would require close coordination between the two governments, particularly in infrastructure planning, energy security, workforce development and cross-border mobility.
Streamlined customs and immigration procedures, alongside stronger physical and digital connectivity, would also be essential to reducing operating costs and enabling businesses to move goods, people and services more efficiently across the border.
"The JS-SEZ creates a significant advantage by bringing together complementary strengths that no single jurisdiction could offer in isolation.
"This includes Johor's abundant land, established industrial capacity, growing talent pool and competitive operating expenses, alongside Singapore's global capital networks, technology, business services and access to international markets," he told Business Times.
The need to translate investment momentum into tangible economic outcomes is also reflected in the government's broader efforts to develop strategic industrial and logistics hubs.
Prime Minister Datuk Seri Anwar Ibrahim, when tabling the 2027 Budget at the Dewan Rakyat earlier this month, said Sedenak Nexus in the northern part of the JS-SEZ had the potential to attract RM12 billion in investments and create 45,000 jobs.
He also said the government would continue strengthening special border economic zones, with trade along the Bukit Kayu Hitam-Sadao corridor reaching RM27 billion in the first six months of this year.
One initiative is the development of the 49.37-hectare NCT InnoSphere as a heavy vehicle, engineering, maintenance and logistics hub serving industries in Kulim and Penang.
According to IRDA, Iskandar Malaysia has generated more than one million jobs and more than doubled average household incomes since its establishment.
However, with competition for investment intensifying across Asean, the region faces growing pressure to move beyond attracting capital and build a more productive economic ecosystem that generates skilled employment, strengthens domestic supply chains and enables Malaysian companies to capture a greater share of the value created.
IRDA said its next development phase would prioritise advanced manufacturing, digital and data-driven industries, modern logistics, and high-value financial and business services.
"Emphasis will be placed on increasing productivity and high-value economic activity, including advanced manufacturing, digital and data-driven industries, and logistics, as well as financial and business services," it said in a statement on Tuesday.
The authority said its strategy would extend beyond headline investment figures to encompass technology transfer, domestic business participation, local innovation and the ability of Malaysian enterprises to move up the global value chain.
Deputy Prime Minister II and Energy Transition and Water Transformation Minister Datuk Seri Fadillah Yusof said Iskandar Malaysia's next phase must be measured by the quality and sustainability of its economic gains, rather than investment figures alone.
Fadillah chaired the 36th IRDA Governing Council meeting on behalf of Anwar, alongside Johor Menteri Besar Datuk Onn Hafiz Ghazi.
"The next phase should be assessed not only by the total investment attracted but also by the quality of opportunities created, the strength of the economic ecosystem, and the long-term benefits that businesses and communities can enjoy," he said.
IRDA said land availability and competitive costs, once major considerations for investors, were no longer sufficient to guarantee competitiveness as businesses increasingly assessed infrastructure readiness, energy reliability, skilled labour availability and digital connectivity.
The efficiency of cross-border movement for goods and people, together with access to regional and international markets, had also become increasingly important in investment decisions.
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