Johor enters multi-year growth phase, REITs to benefit—Maybank IB

• "Our site visit to Johor reaffirmed the state’s rising prominence as both a retail and industrial hub, supported by strong cross-border spending, the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link (end-2026), and the planned Singapore-Johor Special Economic Zone (JS-SEZ).

KUALA LUMPUR (Oct 7): Johor has entered a multi-year growth phase driven by infrastructure integration, industrial diversification and resilient cross-border consumption, said Maybank Investment Bank Bhd (Maybank IB).

The investment bank noted that retail and industrial-focused real estate investment trusts (REITs) with strategic Johor assets, particularly Paradigm REIT (KL:PARADIGM), CapitaLand Malaysia Trust (KL:CLMT), Al-Salam REIT (KL:ALSREIT), AME REIT (KL:AMEREIT) and Axis REITS (KL:AXREIT) are poised to benefit from sustained tenant demand, positive rental trends, and potential valuation uplift. 

"Our site visit to Johor reaffirmed the state’s rising prominence as both a retail and industrial hub, supported by strong cross-border spending, the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link (end-2026), and the planned Singapore-Johor Special Economic Zone (JS-SEZ).

"These catalysts will enhance connectivity, deepen economic integration, and lift property values near key nodes," it said in a note on Tuesday, adding that the Singapore dollar-Malaysia ringgit exchange rate continues to spur weekend spending and industrial demand.

Johor’s key industrial corridors have continued to attract strong demand from precision manufacturing, electric and electrical (E&E), and logistics tenants, Maybank IB said.

Worker dormitories maintain near-full occupancy, while multinational clients are increasingly seeking environment, social, and governance (ESG)-compliant facilities. 

"Although limited water and power capacity have temporarily slowed data-centre development, industrial appetite remains firm, underpinned by Johor’s cost advantage and proximity to Singapore," it said. 

REITs with industrial exposure, such as AME REIT, Axis REITS and CapitaLand Malaysia Trust, are well-positioned to benefit, supported by the JS-SEZ and improved transport connectivity.

Maybank IB maintained its "positive" call on REITs.

As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.