KL-S’pore high speed rail to boost sentiment on the property sector

Bullet train: An artist’s impression of the Batu Pahat station on the HSR line.

PETALING JAYA: The Kuala Lumpur-Singapore high speed rail (HSR) project is expected to further boost sentiment on the property sector as it should spur demand for properties in Iskandar Malaysia, Johor and the Kuala Lumpur city centre, as well as areas surrounding the HSR stations along the alignment.

RHB Research believes Johor could see a major railway infrastructure boom, especially if the government proceeds with the light rail transit (LRT) and HSR projects.

It said this should lift demand for residential, commercial and industrial properties in Iskandar Malaysia in the coming years, with prices of strategically located land parcels escalating.

“We believe UEM Sunrise Bhd remains the best proxy, while Sunway Bhd, IOI Properties Group Bhd and Eco World Development Group Bhd are likely beneficiaries given their landbank exposure near the Second Link and Kulai,” the research house added.

RHB Research, which has maintained its “overweight” stance on the property sector, opined that rail transit systems are necessary to make the Johor-Singapore special economic zone more compelling.

“As the Johor Baru–Singapore Rapid Transit System (RTS) is slated for completion by end 2026, we think the proposed LRT would play a significant role in completing the inter-city railway connectivity, and capturing the rising passenger traffic coming from Singapore.

“The current population in Johor is 4.01 million while Singapore is 5.5 million. Assuming the LRT and HSR projects are implemented, Southern Johor will become a major city that could be comparable to the Klang Valley in the longer run,” the research house said.

The HSR will be a major catalyst to increase southbound human traffic, not only from the population between Malaysia and Singapore, but also international travellers due to the potential connectivity between the Kuala Lumpur International Airport and Changi airport.

Johor will see the longest HSR alignment as more than half of the track will go through the state.

It was reported that the proposed three LRT lines, and the respective terminal stations may be located at Ikea Tebrau, Iskandar Puteri area (either Legoland or Forest City) and Senai. The HSR may also have a station at either Iskandar Puteri or Forest City.

RHB Research thinks the Tuas Link area will see more growth opportunities given the concentration of the new transport system, whereas the Johor central region is already relatively more saturated.

“We reiterate that UEMS and Sunway are the major landowners in that area, while Eco World has recently replenished 240 acres there.

“UEM Sunrise is the prime beneficiary as the last HSR station in Malaysia may be located at Iskandar Puteri (which was the location under the previous proposal),” it added.