Hong Leong Investment Bank Bhd (HLIB) has maintained its OVERWEIGHT call on the property sector, highlighting Johor’s retail, F&B and hospitality segments as the next major beneficiaries of the Johor–Singapore Rapid Transit System (RTS).
The research house said the residential property market near Bukit Chagar has already enjoyed a visible uplift in values ahead of the RTS opening, but the more significant wave of growth will materialise once daily cross-border traffic ramps up.
HLIB noted that malls in Johor Bahru are already attracting strong Singaporean footfall even before the RTS commences operations. KSL Mall is commanding monthly rental rates comparable to prime Kuala Lumpur malls, while Mid Valley Southkey Mall is fetching about RM14 per sq ft.
Paradigm Mall Johor Bahru, meanwhile, is seeing low-teens rental reversions with near full occupancy. The landscape is set to expand further with Sunway’s two upcoming malls, including one integrated with the RTS transit-oriented development (TOD) and another within the Sunway Majestic project.
The hospitality sector is also preparing for the anticipated surge in visitors. HLIB cited YTL’s acquisition of Thistle Johor Bahru Hotel for RM150 million, which is expected to reopen in 2026, as well as Sunway’s plan for a new five-star hotel at its RTS TOD site. These investments mark the beginning of a wider wave of refurbishments and new developments as operators position themselves for a significant rise in tourism once the RTS shortens travel times between Singapore and Johor.
Retail and F&B brands with deep Johor exposure also stand out as structural beneficiaries. SDS Group, a Johor-born bakery and café chain, operates 28 of its 38 outlets in the state, making it a strong proxy for local consumption uplift.
Oriental Kopi, rated HOLD with a target price of RM1.13, has nine outlets in Johor and appeals to Singaporeans seeking familiar flavours at better value compared to home. Focus Point, rated BUY with a target price of RM0.83, operates 33 outlets in Johor out of 196 nationwide, and its scale and pricing advantage in optical products is expected to draw cross-border shoppers.
According to HLIB, Johor’s consumption-driven sectors are poised to be the next growth engines once the RTS becomes operational. The research house said established malls and hotels are well placed to benefit from stronger visitor numbers and potential rental re-rating, while Johor-centric retail and F&B names offer direct leverage to the expected surge in cross-border spending power.
