STEEL stockist HG Metal plans to fork out nearly RM24 million (S$10.8 million) for five industrial lots in South Johor. The Singapore Exchange-listed company will sign a sales and purchase agreement with Malaysia's UEM Land for the lots at the Nusajaya Industrial Park, in south-west Johor.

HG Metal's decision to buy five out of the eight lots in Phase 2 of the park is a boost to the Malaysian government's Iskandar Development Region initiative in which South Johor is seen as being transformed into a regional logistics hub.

Launched in November, the plan calls for massive investments of over RM300 billion spread over some 25 years, but there has been little by way of progress - at least in public.

But the attraction of HG Metal to the scheme indicates that the Khazanah Nasional-driven initiative is beginning to gather some investment interest.

South Johor is being marketed as a natural choice for land-scarce Singapore businesses. South Johor as a whole complements Singapore's growth strategy with an environment that provides an alternative quality of life that is not readily available in the island state, the national investment agency's website tells potential investors.

While the serious floods which have hit Johor have caused widespread damage, BT understands that investors such as HG Metal have not been put off by the negative publicity. A couple of further announcements can be expected after Chinese New Year, a government official told BT.

Already, the share prices of some South Johor-related stocks have risen in anticipation of developments which are expected to boost their prospects.

One such is Malaysian government-linked UEM World, whose wholly owned unit UEM Land is the master developer for the 24,000 acres of Nusajaya, which is supposed to be transformed into an integrated city. Some analysts believe that the company's shares, which have increased in value by more than 80 per cent this year to about RM3.14, have the potential to hit RM5 if UEM's landbank is valued at prices closer to the Klang Valley.

To this end, all eyes are on a special purpose vehicle by the name of Kota Selat Tebrau which has been formed to develop the Danga Bay waterfront area.

The Edge weekly reported over the weekend that Khazanah is to take the lead in this joint venture with state owned Kumpulan Prasarana Rakyat Johor (KPRJ) and Ekovest boss Lim Kang Hoo.

In November, Khazanah indicated that the joint venture company was to have total assets of RM2.4 billion with land stretching from the Causeway to the Second Link. Efforts to further Johor's cyber ambitions also took a step forward yesterday with the signing of a joint venture agreement between the Johor state and Cyberport Holdings and KPRJ to develop a 150 acre self-contained high tech township in Kulai.

MSC Cyberport, owned 70 per cent by Cyberport Holdings and 30 per cent by KPRJ, will spearhead the development of the IT township.

The company, which also signed a memorandum of understanding with ICT (information and communications technology) fund Malaysia Debt Ventures, said more than 100 ICT firms had applied for special IT status under Malaysia's multimedia super corridor incentives.