The proposed mix development at the Johor Bahru – Singapore Rapid Transit System (RTS) link is expected to set a new pricing benchmark upon its launch, potentially lifting prices for other developments in the vicinity.
In addition to this, the special 15% income tax rate granted to eligible skilled workers is expected to attract more higher income population to stay in Iskandar Malaysia which should create a favourable demand for housing.
RHB Investment Bank’s Malaysia Sector Update today (July 31) said MRT Corp and Hong Kong based MTR Corporation Limited signed an MOU for a mixed development next to the RTS link last Friday. Both parties will collaborate on the planning of space, technical design and integration of lifestyle with rail, to ensure sustainability of development and mobility of people.
The mixed property development will connect existing transport service in Johor Bahru including the KTM ETS, city busses, and the future bus rail transit. Profits generated from property development would be used to support the operations and long-term maintenance of railway and to finance new railway projects.
New pricing benchmark in the city centre
RHB opines MTR Corporation is a good partner considering the matured development of the MTR system in Hong Kong as well as MTR Corporation’s expertise in such integrated development. The signing of MOU and the collaboration is another milestone achieved which should ensure that the RTS terminal and the related components are properly planned and designed.
RHB expects the residential units in this mixed development to set a new pricing benchmark (upon launch), given that other residential projects in the vicinity are already going at MYR1k-1.3k psf. This may potentially help to lift property prices in the Johor Bahru city centre in the future.
More incentives from the Government to promote Iskandar Malaysia
Prime Minister Datuk Seri Anwar Ibrahim has also announced a special 15% income tax rate to be granted to eligible skilled workers and companies as part of the Government’s efforts to develop a special financial zone in Iskandar Malaysia. The Government will also offer immigration fast-lane facilities to ease the entry of skilled workers from abroad.
This is to ensure that the special financial zone will be competitive in order to attract international investors and knowledge workers to reside in Malaysia.
Expect a busier Johor Bahru. The recent news flow reaffirms RHBs view that the Iskandar Malaysia property market will stage a recovery from now on.
Given the ongoing and upcoming infrastructure developments, special incentives from the Government and favourable environment to attract foreign and local investments, RHB expects business activities and human traffic in Johor Bahru to gradually increase over the medium term.
New demand for property would be created, benefiting developers with exposure to the Johor property market.
RHB’s Top Picks: UEM Sunrise as a prime beneficiary, IOI Properties and Matrix Concepts. Maintains Overweight call on Property sector.
