AN old but faithful refrain of former premier Tun Mahathir Mohamad was to "Look East", specifically, towards the Land of the Rising Sun and its rapid transformation into an industrial powerhouse as a model for development. It is thus quite appropriate that in return, retiring Japanese are spending their sunset years in Malaysia.
As at August 2012, the Japanese were the third largest group in the Malaysia My Second Home (MM2H) Programme with 2,187 participants since the programme was launched in 2002. China topped the list with 3,332 participants, followed by Bangladesh (2,407), according to statistics from the MM2H centre of the Tourism Ministry.
While the Japanese typically choose to live in Penang, Kuala Lumpur and other upmarket enclaves in the Klang Valley, an asset-building consultancy is promoting Johor — specifically Iskandar Malaysia — as an attractive new or second home for high-net-worth Japanese who are attracted to Malaysia's lower cost of living and balmy climes. Some have also been spooked by the natural disasters back home and the overstretched safety net for Japan's ageing population.
"Iskandar Malaysia and Johor in general are among the best places to invest in. There is great opportunity for growth due to the big economical loop with Singapore. The infrastructure is developed, the business environment has been coordinated and the educational organisations have opened under the Iskandar project," says Global Asia Assets (M) Sdn Bhd (GAAM) CEO Masanori Fujimura, who is currently based in Malaysia.
The company announced last year that it was partnering Kuok Group unit Berinda Properties Sdn Bhd to develop a RM500 million "Little Japan" enclave in Taman Molek and Taman Ponderosa in Johor Baru.
"Our vision for Little Japan started about two years ago in 2010 when we first started marketing condominiums such as Molek Pine Tower 3, Molek Pine Tower 4 and Ponderosa Lakeside apartments in Johor Baru," he says.
The Molek Pine condominiums and Ponderosa Lakeside apartments are being developed by Kuok Group unit, Berinda Properties Sdn Bhd.
There are 508 units in total at Molek Pine Towers 3 and 4, of which 36 are low-rise units. The high-rise units in Tower 3 are 903 to 4,676 sq ft in size and priced at RM641,300 to RM2.85 million while the low-rise units are 2,127 to 3,189 sq ft in size and priced from RM1.05 million to RM1.18 million. Tower 4's condos are 1,441 sq ft to 5,579 sq ft and are priced from RM800,000 to RM4.08 million. Meanwhile, Ponderosa Lakeside has 120 units from 1,300 to 3,759 sq ft and are priced at RM606,000 to RM2.3 million.
The freehold Little Japan will span 15.6 acres, made up of Molek Pine Towers 3 and 4 at 12.6 acres, and Ponderosa Lakeside at three acres. The entire Little Japan will offer 628 high-rise homes and some landed properties as well as 31,000 sq ft of commercial area that will include 18 banks, shops, restaurants, clinics that provide both western and traditional Chinese medical treatment, and other unique Japanese facilities such as public baths (Onsen) amid Zen landscaping.
"The management corporation will be in charge of the condominium facilities while GAAM will coordinate the Little Japan concept. All commercial shops, clinics and restaurants will be owned and managed by individual owners from Japan," says Fujimura.
To create a slice of Japan on Malaysian shores and make the lives of the Japanese community here more comfortable, their homes will come with fittings such as Ofuros or Japanese bath tubs, while domestic helpers from the Philippines are trained to speak Japanese, cook Japanese food and cater for their needs will be made available.
So far, the company has brought over 500 Japanese to live in Johor and another 800 to visit Johor. "GAAM's vision is to attract over 2,000 Japanese to live in Little Japan, create more job opportunities for Malaysians and bring in investments of over RM500 million to boost Malaysia's economy," Fujimura says. Ultimately, Little Japan will open its doors to a more international crowd, he adds.
Some of the company's investors are "self-made millionaires" aged 35 to 50 with their own sizable portfolio of investments in Japan. According to Fujimura, some have already moved to Johor Baru while others are "waiting anxiously" for the completion of Molek Pine Tower 3, expected in July, and Molek Pine Tower 4, by March 2015.
Describing their preferences, he says GAAM's investors prefer high-rise properties in mature areas, but they do not mind venturing into places with good potential for growth.
Iskandar Malaysia's draw
GAAM saw potential in Iskandar Malaysia's proximity to Singapore, as well as its infrastructure, facilities and relative ease of doing business.
"The Japanese have been looking for a second home and currently Johor is their number one destination. The reasons are the warm climate, absence of natural disasters, cheaper cost of living, political stability, no slumps, balanced society, good security systems, and opportunities for an English education, which they think is very important," says Fujimura.
Some of the more prestigious schools in Johor are Marlborough College, Newcastle University, Raffles American School, Raffles University Iskandar, University of Southampton, Netherlands Maritime Institute of Technology, Sunway College, Monash University, Crescendo International College, Newcastle University Medicine Malaysia, Pegasus International School, Excelsior International School and Masterskill Global College.
"There is a big demand from the younger generation of Japanese to come to Johor Baru for a better English education at a very low cost," he explains.
For example, in Marlborough College, fees in the Malaysian campus for day school students in reception to year 10 ranges from RM56,760 to RM76,500 for the 2012/2013 academic year, while boarders in Years 7 to 10 can be charged RM121,260 to RM126,000 per academic year.
In comparison, the UK campus' basic fees for boarders are £31,350 (RM152,495) a year while day pupils are charged £26,640, according to the website of Marlborough College's UK campus.
The potential upside arising from Singapore and Iskandar Malaysia's synergistic relationship is also an attraction. Like many other property players and industry experts, Fujimura compares the two cities' relationship to that of Shenzhen and Hong Kong as well as Zhuhai and Macau, with the latter two being financial hubs.
This is coupled with the 20,000-strong Japanese population in the island republic. "We hope to boost migration, tourism and commercial activity in Malaysia and Singapore. The Japanese migration due to Little Japan will in turn boost the tourism industry in Malaysia and Singapore."
According to KGV International executive director Samuel Tan in The Edge/KGV International Johor Baru Housing Property Monitor 3Q2012, values of 2-storey terraced houses in Taman Molek have risen 5% q-o-q to RM630,000 while 2-storey semi-detached homes shot up 16.6% to RM700,000. The 1,469 sq ft, mid-level units at Molek Pine Tower 2 have appreciated by 4% to RM520,000, thanks to the opening of the Eastern Dispersal Link and the upcoming Little Japan project.
Japanese investors around the world
GAAM, which was founded in 2010, is a member of Global Asia Investment Ltd (GAIL). The group is currently helmed by Fujimura and has branches in Macau, China; Makati and Cebu in the Philippines; and Ayutthaya in Thailand. Besides asset management, the group also offers consultation services for investment, addressing issues such as inheritance and business inheritance.
Besides money matters, the group also helps potential clients during the transition from their home country to their new lives abroad. This includes assisting in long-term visa or immigration paperwork, providing English learning opportunities and helping investors set up companies abroad. For more premium investors, GAIL offers additional support such as flight and hotel-booking services, high-quality medical services by Japanese-speaking staff, and recreation such as golfing and wine-tasting.
In Makati, the group sold 146 One Central condos and 138 Two Central condos to Japanese investors. At Zhuhai, the group sold 25 condos at the Riviera, a gated and guarded retirement village on the waterfront.
"We currently have 20,000 clients and the number is growing fast. In Johor, we have applied for MM2H for over 100 Japanese. Prior to our arrival in Malaysia, only two Japanese applied for MM2H in Johor," says Fujimura.
The Global Group will also be introducing Little Japans in Thailand and the Philippines, with similar developments to follow in China in the near future, he adds.
This story first appeared in The Edge weekly edition of Feb 11-17, 2013.