Rail Link to Narrow M’sia, S’pore Price Gap
The future high-speed rail link between Singapore and Kuala Lumpur will benefit property developers and construction firms as it will reduce the price gap of properties in both countries in the long term.
The project will also boost the construction and building materials sector, said PublicInvest Research.
“While information is still light at this juncture, we believe the warmer relationship between the two governments now offers much comfort and we would probably see more progress on the project in the next 12 months.”
On Tuesday, Singapore and Malaysia agreed to build the rail link. To be completed in 2020, it will reduce travel time between Singapore and KL to just 90 minutes.
The project is expected to create job flows worth an estimated RM40 billion (S$16 billion) and RM50 billion (S$20 billion), benefiting the construction sector in the near term, and property developers especially in KL and Johor in the long term.
“Notwithstanding the (upcoming Malaysian general) election risks that might throw a spanner in the works, we believe if the project is feasible and creates wealth, there is no reason not to consider it,” said the research house.
Potential beneficiaries include construction players like YTL Corp, MMC Corp and Gamuda, as well as landbank owners in both KL and Johor such as E&O, SP Setia and UEM Land.
Meanwhile, RHB Research Institute believes the project will be a huge re-rating catalyst for Malaysian properties, especially in Kuala Lumpur.
“It is a new growth driver for the high-end properties in KL and Mont’ Kiara. Coupled with the MRT network, not only the residential properties but also the commercial properties could receive a boost in the future.”
Source From PropertyGuru 22th Feb 2013