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Several property firms owning large land parcels in Johor can expect greater investor interest as Malaysia and Singapore resolved their previous issues.
The special economic zone of Iskandar Malaysia and Johor’s property sectors are likely to be the biggest gainers.
Many analysts reckon that property developers in Johor “could be back in play”, with the proposals for a new rapid transit line between Singapore and Tanjung Puteri in Johor Bahru, as well as reducing the Second Link toll rates and increasing tax and bus services.
Despite the bearish stockmarket sentiments over the past two days, property developers like Tebrau Teguh and UEM Land, which have vast landbanks in Johor have seen a greater increase in interest.
With around 3,300 hectares of land in the southern state, UEM Land has been one of the most active counters. It closed three sen up at RM1.33 yesterday, after hitting an intra-day high of RM1.37.
The progress made on several outstanding issues over the past 20 years, including parcels of land owned by KTM in Singapore, which will now be jointly developed by the state investment agencies of both countries, as well as the commitment of Singapore to a proposed wellness township in Iskandar, has enhanced optimism that the development would now be hastened.
Mr. Danny Yeo, director of CH Williams Talhar & Wong, said: “Oh yes, Johor and Iskandar have become more attractive, especially if Temasek comes in and brings others.”
CLSA, which had earlier committed to improving Singapore-Malaysia relations, was also confident that “the pieces were falling in place very quickly”. It anticipates that more Singaporeans will be residing in Iskandar.
The proposed rapid transit link between Malaysia and Singapore will likely smoothen cross border movements upon its completion in 2018.
Real estate players around the Johor city area are positive that they will benefit from the proposed rail connection. “The South Key project just got better with the rail connection,” said Mr. Yeo. The promoters of the mixed development project worth RM12 billion, located on the former Majidi army campsite, intend to launch the first phase in the coming months. It will involve three-storey shop lots.
According to Mr. Yeo, sentiments on the latest developments have greatly improved. Properties are a better hedge against inflation, which is likely to see higher increase if the Goods & Services Tax takes effect in 2011, he added. “All that coupled with the recent rate hike will only push buyers to commit earlier rather than later in order to lock in rates.”