RHB Investment Bank maintained its “overweight” call on the Iskandar Malaysia property market citing strong growth prospects.
The research house in a report on Monday (Oct 9) said its top picks on the Iskandar Malaysia Property Market are stocks with strong presence there with upcoming projects, namely UEM Sunrise Bhd (“buy”; target price or TP: RM0.92), Sunway Bhd (“buy”; TP: RM2.67), and IOI Properties Group Bhd (“buy”; TP: RM2.10).
Investors can anticipate robust demand for projects in proximity to the Rapid Transit System (RTS).
Besides, the increasing purchasing power driven by the Singapore Dollar (SGD) is projected to yield favourable ripple effects for businesses in the retail, hospitality, and real estate sectors located farther from the city center, gradually amplifying their growth prospects.
It said investors should take note that property agents are experiencing a surge in inquiries from prospective Singaporean buyers.
Additionally, it said monthly rental rates for specific condominiums in the city center have escalated from RM2,500 to RM5,000 per unit following the reopening of the Singapore-Malaysia border in April 2022. Besides, the number of visitors from Singapore rose significantly
These rates are now in line with rental rates observed in Kuala Lumpur’s city center. In addition, a subset of Airbnb operators has reported a notable increase in occupancy rates, averaging between 70% to 80% year-to-date for the units they manage.
The first phase of WCity @ JGCC project, just a 10-minute drive away (7km) from the RTS station at Bukit Chagar, will make its debut in the next one to two months.
With an average selling price (ASP) of RM900 per square feet (psf) before discount, the project developer has obtained government approval to sell units priced above RM400,000 to foreigners.
The research firm said it would be able to garner strong interest from local and international buyers given its concept, layout and, more importantly, short distance to the RTS.
The second residential block in Coronation Square, which is the project closest to the RTS station with a 300 metre skybridge, will be launched soon.
The first block is already 80% booked, with 60% of the sale & purchase agreements signed.
Compared with an ASP of RM1,200 psf for the first tower, the second tower will likely be priced at RM1,300 to RM1,350 psf.
As for the residential component to be developed by MTR Corp, the ASP is expected to be around MYR1,800 psf upon the launch of the project as it will be integrated with the RTS terminal and the customs, immigration and quarantine or CIQ complex.
The research house quoted Johor State Executive Council member for investment, trade, and consumer affairs Lee Ting Han, the Johor-Singapore special economic zone may involve a few specific sectors, and the finalisation of the terms of reference during the upcoming meeting at the end of this month by the two countries’ leaders should facilitate further talks on collaboration.
Lee believes that Johor is a beneficiary of the US-China trade war, as he has been receiving strong interest from MNCs since the borders re-opened.
The fast-lane service has eased the entry of corporations in the digital economy, pharmaceuticals, electronic and electrical, electronics manufacturing services, chemicals & petrochemicals, and aerospace sectors.
