The latest residential transaction data compiled by Savills indicates that more owners and investors are pricing in the boost that the Johor-Singapore Special Economic Zone (JS-SEZ) is expected to bring to parts of southern Johor.
When it was unveiled by the Singapore and Malaysian governments last year, the bilateral initiative aimed to create a more integrated business hub across nine flagship zones in Johor.
This pairs with the Johor Bahru-Singapore Rapid Transit System (RTS) link, which has been delayed to February 2027, and will enhance cross-border travel from Woodlands North in Singapore to Bukit Chagar in Johor Bahru (JB) city.
According to market research by Savills, residential properties within the nine flagship zones in the JS-SEZ have recorded a yearly price growth of between 7 - 9%, a significantly stronger performance compared to the 2 - 4% price growth across the entire state of Johor over the same period.
Similarly, residential rental properties in these pockets have posted average yields that are a cut above the state-wide average, of about 6 - 8% compared to 5 - 6% that the Johor market as a whole has recorded in the past year.
According to Savills, the stronger rental performance is largely attributed to a rising demand for corporate housing within the nine flagship zones. The zones are: the JB waterfront, Iskandar Puteri, Tanjung Pelepas, Tanjung Langsat, Senai-Skudai, Kulai-Sedenak, Desaru-Penawar, Forest City, and Pengerang.
Savills identified that the growth of the rental markets in these flagship zones has fostered a new asset class of specialised corporate rentals, which could offer a bright spot amid the ongoing oversupply woes in Johor, the consultancy says.
However, not all market watchers and analysts share such positive sentiments.
Melvin Soh, CEO of MyRumahBaru, a Malaysian property platform that tracks NAPIC transaction data, said growth will likely look different from area to area, since supply levels vary a lot across the country.
For investors, this means that they should proceed with caution, especially those who might be banking on the development of the SEZ in driving up rents, yields, and property rentability.
A New Asset Class?
Nevertheless, the prospects of the JS-SEZ may contribute to the emergence of a new rental asset category in Johor that is distinct from both the local rental market and the speculative high-rise stock from Johor's past booms, says Adrian Lim, Senior Director of International Residential Sales, at Savills.
These properties will have characteristics such as:
- Part of large-scale, master-planned mixed-use developments built over the last 10 years, with access to lifestyle amenities (grocery stores, F&B, and wellness facilities) on-site or nearby.
- Strictly clustered within a 1 - 3 km radius of major economic catalysts: predominantly the Bukit Chagar/JB Sentral RTS terminus, the immediate area around JB CIQ, the core JB City Centre, or core employment nodes at Medini/Iskandar Puteri.
- Purpose-built accommodation, rather than converted residential stock. Built with international management standards, with functional one- to three-bedroom layouts suitable for single executives or couples.
- And anchored with robust multi-tier security, reliable lift-to-unit ratios, and professional property management services.
According to Savills, some examples of these types of developments include Suasana Iskandar by developer UMLand in JB City Centre, which is an integrated development combining residences, retail, and a hotel; as well as R&F Princess Cove in the JB City Centre, which has linked bridge access and is connected to a mall.
There are also TriTower, Paragon Suites, and Astake Projects - high-end vertical residences that are popular with management-tier corporate tenants, according to the Savills corporate leasing team.
Within the Iskandar Puteri area - the administrative, educational, and tech-park core of Iskandar - is Eco Botanic by Eco-World. This is a premium landed and gated community that appeals to higher-income families and senior executives who prefer a suburban township vibe over high-rises.
The Iskandar Puteri area also houses international schools like Marlborough College, medical hubs, and corporate offices. These are the types of amenities that attract expat families, educators, and regional corporate personnel, says Lim.
"Unlike traditional local rental demand, corporate tenants in Johor prioritise security (gated & guarded/concierge services), proximity to international schools or major highways/RTS, and integrated lifestyle amenities (such as cafes, supermarkets, and wellness facilities) within walking distance or a short drive from their homes," he says.
Who Will be Renting These Properties?
Based on the preliminary plans for the SEZ, the bilateral initiative will adopt a 'hub and spoke' model. An important component is Singapore's status as a regional and international financial hub, and the headquarters of many international conglomerates and multinational corporations.
The plan aims to unlock "corridors" of business activity in Johor that fan out in 'spokes' to the flagship zones. Some areas, like the Pengerang industrial complex, have started to see substantial investment poured in.
"A model like this allows corporations to capture the best of both worlds: retaining Singapore for global corporate governance, legal contracts, intellectual property (IP), and regional treasury, while utilising Johor for physical scale, land, and heavy operations," Lim said.
He adds that the existing economic model - where nearly all of the knowledge workers are based in Singapore, while only blue-collar manufacturing labour is located in Johor - no longer applies to today's tech-driven operations.
Instead, the split is functional. While most of the strategic and financial knowledge workers will continue to be based in Singapore, most of the technical, operational, and engineering workforce is likely to be based in Johor. This includes data centre facility engineers, automation specialists, supply chain directors, and manufacturing process managers.
"Many of these roles are regional technical experts or expats seconded from Japan or the US to manage the heavy infrastructure," says Lim. "Furthermore, targeted incentives (like the preferential tax frameworks under the JS-SEZ) are specifically designed to attract high-value talent to reside locally".
Why Does Johor Need New Stock Even with all the Overhang?
Savills predicts that these new types of corporate rentals will make up a portion of the 115,000 homes that Johor plans to add by 2030.
But some market watchers are uncertain about the need to add new housing, when there are still about 9,972 units in Johor sitting unsold in 1H2026, a figure that is more than double the unsold stock in Kuala Lumpur.
But Savills argues that this new stock is different from what it calls "generic Johor stock", which are the "cookie-cutter" and "non-distinctive" high-rise properties which mostly served speculative foreign investors.
These are uninspired and mass-produced developments which constitute 'ghost-towns' or thousands of completed units sitting empty with very little vibrant community life or functioning retail underneath, says Lim.
Such poorly received properties are often found strung out along transit or highway corridors that were hyped up years ago. Likewise, such properties are clustered along the coastal highway leading toward Danga Bay, parts of Iskandar Puteri, or isolated pockets far from actual economic activity, says Lim.
These properties were primarily bought by investors who were lured by the promise of attractive capital gains or rental yields. Most were snapped up by absentee owners from China and Singapore, as investment vehicles or "paper assets" rather than homes to live in.
But since those developments were priced aggressively at the peak of their hype, their secondary market values often took a severe hit when the market moderated.
"While the overarching state statistics are skewed by the supply overhang comprising thousands of units of generic serviced apartments, the sub-markets tied directly to the RTS Link corridor and immediate CIQ catchment are decoupled from that supply situation," says Lim.
According to him, those specific types of properties are better positioned for strong resilience, compressed vacancy rates, and steady corporate absorption.
So, Where Should Investors Watch out?
Rental and investment opportunities near the RTS Link and in well-connected business areas could see good take-up, especially from Singapore-based tenants and companies, says Soh, adding that some units completed in earlier market cycles are still being taken up.
A long-running oversupply situation and plateauing market demand mean that the prices of completed residential developments are largely suppressed, and this is impacting the resale market and making liquidation more challenging.
However, there are signs that this might be changing in Johor, with serviced apartment psf prices rising 20.4% in the first half of 2026 compared to the year prior, according to news reporting.
Rental demand tends to differ by location, and areas further out from JB city centre may not see the same level of interest, since supply is spread across many areas, says Soh.
But he is optimistic that the RTS Link and JS-SEZ will help bolster demand, but absorbing the existing supply will take time. He suggested that buyers scrutinise the fundamentals of each project, instead of relying on infrastructure catalysts. Some price expectations are based on planned infrastructure, so buyers should factor in when these projects actually get delivered, he says.
Due to the severity of the supply overhang that Johor faces, even rental price growth in certain pockets can easily be encroached upon by the greater market. Operators like StayMoka are repurposing empty serviced apartments to target more corporate rentals.
But Is This Time Different from The Last?
It's important to remember that Johor has been here before. In 2006, the Malaysian government launched the South Johor Economic Region, later renamed Iskandar Malaysia, to turn southern Johor into an economic hub.
But speculation followed, and throughout the early 2010s, developers and investors poured money into high-rise projects, betting on a steady stream of foreign buyers, especially from China.
That went south when the buyers stopped coming. China tightened controls on money leaving the country around 2017, and Malaysian policy towards Forest City's foreign buyers turned uncertain in 2018.
That left new developments entering a market that couldn't absorb them, and Johor was left with the country's largest glut of unsold homes.
This time around, Soh said, the Singapore government's joint role in planning the JS-SEZ gives more grounds for optimism.
But there is no shortage of ambitious master plans and headline-making announcements. The real test is in the execution, and it is still too early to tell.
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