KUALA LUMPUR (Jan 9): It has been officially announced that the Kuala Lumpur-Singapore high-speed rail (HSR) is terminated. As a result, it seems to be bad news for property developments that hoped to ride on the “potential” of the mega project.
There is of course still hope of a Malaysian effort only HSR from KL to Johor Bahru but there are no solid plans on that yet in the near future.
“Thus, the gestation period for Bandar Malaysia — the HSR terminus in KL — and Vision Valley 2.0 projects could take longer than planned,” wrote The Edge Malaysia in its latest issue.
But it is not all gloom and doom. Kenanga Research analyst Lum Joe Shen told the weekly that while Bandar Malaysia will take a longer time to complete owing to the latest developments, “the location is quite strategic with two MRT stations”.
“The HSR is not the only key for Bandar Malaysia. With proper planning, it will be able to get good demand. Of course, with the HSR, there will be more pent-up demand as foreigners may choose to stay there.
“I personally feel that it is fine without the HSR. Instead, projects such as the MRT 3 will serve us better. The economic impact of the HSR is debatable as there is no certainty in terms of fund flows,” he said.
Instead, Lum feels that Sime Darby Property Bhd’s Malaysia Vision Valley project “could be affected more significantly by the termination of the HSR”.
“It [Vision Valley] is being built on the idea of commercial and industrial purposes. The marketability of the development will see more impact,” he said.
Meanwhile, there are some who thinks that a domestic HSR would kick off. “Based on our channel checks, the KL-Johor Bahru HSR is something that is in the works. I think the government just wants to get the upper hand because the final connection to Singapore can be constructed much later,” an analyst who did not want to be named told the business publication.
“Eventually, Singapore will come to the table. This will force it to take up the modifications proposed by Malaysia.
“The commercial viability of mega projects along the HSR line will be severely affected if there is no HSR. I don’t think it will turn out to be very successful without an HSR station in Bandar Malaysia. Developers may not go in if the HSR is not there,” said the analyst.
As for CBRE | WTW group managing director Foo Gee Jen, he is of the view that investors should look at the property projects in the long term.
“Even with the HSR, you would not feel the actual impact immediately. For those who want to buy in Bandar Malaysia, Vision Valley and Iskandar Puteri, they will have to see the long-term value. I am positive that the government will revisit the HSR project in the future, supported by China’s Belt and Road Initiative,” Foo explained.
Read the full report in this week’s The Edge Malaysia
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