Maybank Investment Bank (Maybank IB) is encouraged by Al-Salam REIT’s plan to build a Pedestrian Overhead Bridge (POB) to connect KOMTAR JBCC to the planned link bridge of Rapid Transit System (RTS) Link Bukit Chagar Station.
“The POB is expected to be opened in 2027, with the commencement of the RTS Link service. We expect this POB to drive footfall traffic and higher rental rates for KOMTAR JBCC. Our forecasts are unchanged,” said Maybank IB.
Al-Salam has signed a Memorandum Of Understanding (MOU) with Malaysia Rapid Transit System Sdn Bhd (MRTS) for the development of the POB.
The POB will be constructed by Al-Salam and JLand Group Sdn Bhd. Pedestrian flow will be directed from the planned RTS Link bridge to KOMTAR JBCC and the surrounding Ibrahim International Business District.
The RTS connects Singapore and Malaysia and has an estimated capacity of 10,000 passengers per hour per direction. Traffic from the RTS is expected to significantly improve footfalls, tenants’ sales and parking occupancy at KOMTAR JBCC.
The POB would cost approximately RM10m-15m in capital expenditure, expected to be ready in 2027. As such, Al-Salam will also undertake extensive asset enhancements initiatives (AEI) by upgrading facilities and overall layout at KOMTAR JBCC.
“Moving forward, it expects to increase KOMTAR JBCC’s operating hours from 10am-10pm, to 6am-12am daily. The AEI cost is estimated to be around RM25m. We understand there is a potential private placement, to fund both the construction of POB and the AEI,” said Maybank IB.
The research house is positive on this development as they believe that a turnaround strategy at KOMTAR JBCC remains a key re-rating catalyst for Al-Salam.
Management plans to reconfigure its tenant mix and bring in premium brands into KOMTAR JBCC. With the initiatives as well as the normalisation of retail spending from Singapore, KOMTAR JBCC’s footfall is expected to increase. The Property Manager expects KOMTAR JBCC’s total revenue to increase by at least 30% in 2Q24 from 2Q23.
