Both big and small property owners are on track to reap big benefits from the opening of 11 new stations on the Circle Line, according to a Credit Suisse report.
Credit Suisse said that industrial landlords like Mapletree Logistics Trust (MapletreeLog), Ascendas REIT (A-REIT) and Suntec REIT own large properties around these stations and will expect gains from the new transport route.
The report also showed that property values of homes close to these MRT stations, which opened on Saturday, have fared better than the overall property market.
The proximity of such homes to the MRT stations has been gradually factored in over recent years.
Prices of private homes like Springbloom and Chiltern Park around Lorong Chuan station have risen 27 percent to 40 percent since June 2008.
According to Credit Suisse, they outperformed the overall market during the period in anticipation of the opening of the Circle Line.
Properties near MRT stations fetch a 15 percent to 20 percent premium to similar properties that are not close to them, according to the report.
When the North-East Line’s opening coincided with the Sars-related economic downturn in June 2003, projects such as Sunglade near the Serangoon station and Compass Heights at Sengkang MRT station managed to hold up.
This was despite a drop of 12 percent in the property price index between 2001 and 2004, the report said.
It added that property firms A-Reit and MapletreeLog, which owns industrial assets near the new MacPherson and Tai Seng stations, will benefit from the Circle Line opening.
Credit Suisse is positive on both MapletreeLog and A-Reit stakes. It has a target price of $2.24 on A-Reit, which ended at $1.98 yesterday.
It tips 98 cents for MapletreeLog, which closed at 85.5 cents yesterday.
Suntec REIT and its manager ARA were singled out for the offices and malls in Suntec City, which will enjoy a greater footfall due to its proximity to the Promenade and Esplanade stations.
Similar increases in traffic could also be enjoyed by property developer Hongkong Land’s One Raffles Link and CityLink Mall, and the mega City Developments South Beach mixed project because of the Esplanade station.
Office workers and patrons at The Concourse, The Furniture Mall, Keypoint and The Plaza will also benefit from the new Nicoll Highway station, added the report.
However, as the new line changes the traffic patterns, “shops lining the different routes will swop fortunes – more pedestrian traffic for some and less for others,” said Mr. Colin Tan, research and consultancy director of Chesterton Suntec International.
“For malls, the competition level is raised. If you’re better, you will grab a large market share, but if your mall is not as appealing, you will lose more traffic from your own surrounding catchment than you gain from others,” he added.
The report also noted that new residential developments like Dakota Residences by Ho Bee and Waterbank @Dakota by UOL near the new Dakota station, with a range of $900 psf to $1,400 psf, have received overwhelming response from buyers.
Mr. Nicholas Mak, a real estate lecturer from Ngee Ann Polytechnic, said that properties near stations are not immune to rental pressures and economic downturns, although they tend to be more resilient.
He added that developers and sellers of homes near such stations can ask for a 10 percent to 20 percent premium, but might not necessarily get it, depending on the other attributes of the property.