TA Research said this in a report after a study trip to Iskandar Malaysia, the southern development corridor in the south of Malaysia.
The research house noted the RTS Link project, a cross-border rapid transit system connecting Malaysia and Singapore, will help increase mobility in Johor Baru and expedite the growth of Iskandar Malaysia.
“The total length of the railway is about 4km, connecting Bukit Chagar Station in Johor Bahru to Woodlands North Station in Singapore.
“Upon completion, the total travel time between Malaysia and Singapore is estimated to be around 15 minutes for the journey, including the immigration clearance. The RTS Link will be integrated with local transport networks at both stations, “ it added.
It said Ekovest was undoubtedly one of the primary beneficiaries of the RTS Link project as it had recently been appointed by MRT Corp to become the collaborative partner to Adil Permata Sdn Bhd, the main contractor for the RTS Link in Johor Bahru.
“Other listed construction players benefiting from this project include Gadang and Econpile.
Apart from these, TA Research does not expect any other construction companies under its coverage to benefit significantly from this project, given that the project value is relatively small.
“Although the whole RTS Link project is estimated to cost almost RM10bil, Malaysia’s portion is estimated to cost about RM3.7bil only after including the depot,” it said.
Hence, it is maintaining its “neutral” stance on the construction sector as this project alone may not be sufficient to serve as a re-rating catalyst, TA said.
It is also maintaining a “neutral” call on the property sector.
“Except for Iskandar Waterfront Holdings, we do not expect developers we met during this trip to be direct beneficiaries of RTS, as their landbank is far from the city centre, “ it said.
However, it said with the country’s economic recovery, it expects the Johor property market to move gradually into positive territory.
“The demand for landed residential properties, especially those in established neighbourhoods and emerging suburbs with good access to major highways, remains intense post-pandemic.
“In contrast, the poor demand for high-rise in Johor persists due to an oversupplied market and the lack of local demand,” it said.
As a result, we observed that developers have switched their focus to landed homes to cater to market demand, it said.
“Meanwhile, the industrial sub-sector remains the bright spot in Johor’s property market, supported by continuous foreign direct investments into Iskandar Malaysia and expanding business and economic activity in manufacturing and logistics.”