HSR stop for Genting Pura Kencana?


  • Business
  • Saturday, 22 Oct 2016

A commercial area of the Genting Pura Kencana township in Sri Gading, which is about 12km from Batu Pahat.

A Transport-oriented development (TOD) is in the works for Genting Plantations Bhd’s Genting Pura Kencana township near Batu Pahat, with a proposed station for the Kuala Lumpur-Singapore High Speed Rail (HSR) project to be built on its land within the township.

The company says it is set to take advantage of the proposed station on its land and is already in talks with the project delivery company, MyHSR Corp Sdn Bhd (MyHSR).

The 8,000-acre township, which was launched in December 2006, is being developed in phases, with Phase 1, covering 320 acres, nearing completion.

The project has now progressed to Phase 2, which spans 510 acres.

The township is located in Sri Gading, which is about 12km from Batu Pahat.

It has been widely reported that one of the eight planned HSR stations would be in Batu Pahat, with the Deputy Transport Minister, Datuk Aziz Kaprawi quoted as saying that the station is proposed to be within the Genting Pura Kencana township.

A company spokesperson tells StarBizWeek that external parties have proposed developments within the township, including a large shopping mall and a transportation hub to serve the town of Batu Pahat.

“Meanwhile, we are also in talks to attract investors to establish businesses and factories in the township, thus, creating additional job and business opportunities for locals.

“The idea is to re-plan part of the development to a more modern industries-based outfit that caters to SMEs and to also attract existing SMEs in Batu Pahat to relocate to our area,” the spokesperson says.

The township is a mixed development comprising various residential and commercial properties.

To date, the company has developed single and double-storey terrace houses, semi-detached houses, bungalows, linked bungalows, shop offices and shop houses.

The project also has a RM14mil clubhouse with sporting facilities ranging from badminton, futsal and tennis courts and, swimming pool.

He says the proposed station is expected to add value to the development.

“We foresee a wider target market for our products given the better connectivity to Kuala Lumpur, Johor Baru and Singapore, appreciation in value for land adjacent and/or close to the station, and the possibility for a greater variety of products to be offered, on par with those offered in major towns.

“For sure, a comprehensive transport oriented development will be planned to take advantage of the presence of the station,” he adds.

The highly anticipated RM70bil HSR project will run for 350km from Kuala Lumpur to Singapore, with construction of the rail line expected to start in 2018.

Revenue services are scheduled to operate in 2026.

Analysts expect the HSR project to spur economic development in its surrounding areas.

On July 19, Malaysia and Singapore signed a memorandum of understanding on the HSR which will see eight stations built between both points.

The six intermediate stations will be located in Putrajaya, Seremban (Labu), Ayer Keroh, Muar (Pagoh), Batu Pahat and Iskandar Puteri.

CIMB Research earlier named Sime Darby Bhd, Genting Plantations and Kuala Lumpur Kepong Bhd (KLK) as the plantation companies that would be potential beneficiaries of the HSR project. Sime Darby is expected to be the main beneficiary of the two HSR stops in Seremban and Muar as the proposed stations are likely to be located in Labu and Pagoh, where Sime Darby has around 15,000 acres of land.

KLK, it said, could benefit from its joint venture with UEM in Iskandar as the Iskandar Puteri station may be located in its project. KLK has a 60% stake in this project with a land area of 202 ha.

“The HSR project could boost the valuations of the planters’ land banks due to property development potential.

“Sime Darby, KLK and Genting Plantations have their own property arm to develop the land but could selectively sell some of these lands to unlock value.

“This could boost near-term earnings via land sale gains,” it said.

The research house estimated that for every RM5 psf increase in the value of the landbank where the proposed station is located, revalued net asset value (RNAV) would rise by RM2.45 for Genting Plantations, 52 sen for Sime Darby, and 10 sen for KLK.

“The spillover benefits from the rise in land value from the HSR project are long term in nature as the project will only be completed in 2026.

“Genting Plantations and Sime Darby appear to be the biggest potential beneficiaries of the HSR among the planters,” it says.

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