KL-Singapore high speed rail, special economic zone would boost Johor's real estate market

 By Sharen Kaur - July 17, 2023, Published in NST Property

sharen@nst.com.my

KUALA LUMPUR: New catalytic projects like the Johor-Singapore special economic zone (SEZ) and the Kuala Lumpur-Singapore high speed rail (KL-SG HSR) will significantly benefit Kuala Lumpur and Johor.

  According to RHB analyst Loong Kok Wen, these projects, including the RTS, would influence the real estate market in Johor, particularly in Iskandar Puteri.

  She suggested that the Iskandar Puteri station be kept in mind because both countries will be able to enhance economic growth in new neighbourhoods close to the second link, including Jurong East in Singapore and Gerbang Nusajaya in Johor. 

  "Property as a high-beta sector has seen some positive momentum since early July. We remain upbeat on the sector given the positive news flow that could lift the property market sentiment, including the revival of the major infrastructure projects, and potential catalytic developments, as well as a stable interest rate outlook," she said in a note.

  KL-SG HSR is formally returning thanks to the government. 

  MyHSR Corp Sdn Bhd, the project manager, has just publicly asked all interested parties to submit ideas for the Request for Information (RFI) exercise, which has been available online since July 12 and has a closing date of November 15. 

  The concept proposal RFI briefing will take place on July 27.

  "It is still uncertain if the stations and alignment under the previous proposals will be maintained, but we think the project is very likely to yield a positive economic impact for Kuala Lumpur and Johor. 

  "While this will be a long-term project, the expectation is that the visitor flow from Malaysia to Singapore (and vice versa) will have a significant economic impact on both countries, and properties in Malaysia should be re-rated further given the low base and cheaper prices," Loong said.

  UEM Sunrise Bhd, according to Loong, is clearly the winner because of its 2,461 acres of land in Gerbang Nusajaya.

  She added that if the current alignment remains the same, Sime Darby Property (Bandar Universiti Pagoh for the Muar station), IOI Properties Group (IOI Resort City for the Putrajaya station, and Ayer Keroh land for the Melaka station), and Matrix Concepts Holdings Bhd (new land in Labu for the Labu station) would be among the other developers who would benefit. 

  Eco World Development Group Bhd, for its Eco Botanic project in Johor, is one of the additional beneficiaries.

  "We believe property sales momentum will stay strong this and next year, and the Johor property market should see sustainable recovery going forward," Loong said.

  Both Johor Mentri Besar Datuk Onn Hafiz Ghani and Economy Minister Rafizi Ramli discussed the planned SEZ early this year.

   Both governments made the announcement that a special task force will be established to determine the zone's broad areas of cooperation and its scope of authority following the Malaysia-Singapore Ministerial Joint Committee Meeting for Iskandar Malaysia (JMCIM) meeting last week.

  According to reports, the SEZ will capitalise on the benefits and allure of both Singapore and Johor, provide employment possibilities, and enhance the standard of living for residents on both sides. 

  Transport connectivity, innovation, the business ecosystem, the environment, tourism, technical and skills training, and renewable energy are all possible areas of cooperation.

  Additional ferry routes between Johor and Singapore (Tanjung Pengelih-Singapore and Desaru-Singapore) are also being discussed by the two governments, and a prospective new service between Puteri Harbour and Tuas will also be evaluated for practicality.

  "We view all these positively, as it indicates that both the Malaysian and Singaporean governments are working well together, and Johor may be able to capture a stronger inflow of investments from Singapore going forward," Loong said.