Johor Bahru property prices, rentals catching up with Klang Valley on RTS Link, strong Singapore dollar — RHB IB

• According to RHB Investment Bank (RHB IB), which has received insights from real estate agency Knight Frank Malaysia, a lot of infrastructure projects, property developments, facility expansions and investments are “brewing” in Iskandar Malaysia, which is formed by major cities in Johor.

KUALA LUMPUR (Aug 21): Property prices of high-rise projects and rental rates at shopping malls in the Johor Bahru (pictured) city centre are now close to rates in the Klang Valley, driven by the effect of the Johor Bahru-Singapore Rapid Transit System (RTS) Link and a strong Singapore dollar.

According to RHB Investment Bank (RHB IB), which has received insights from real estate agency Knight Frank Malaysia, a lot of infrastructure projects, property developments, facility expansions and investments are “brewing” in Iskandar Malaysia, which is formed by major cities in Johor.

In its property sector note released on Monday (Aug 21), RHB IB assigned an “overweight” rating to the market, with “buy” calls for its top picks UEM Sunrise Bhd at a target price (TP) 92 sen, IOI Properties Group Bhd at a TP of RM1.46, and Matrix Concepts Holdings Bhd at RM1.75.

“Knight Frank shared that transactions for a few high-rise projects have reached RM900 to RM1,100 psf, which are almost on a par with property prices in the Klang Valley,” RHB IB said for projects surrounding the RTS Link, which is slated to complete at end-2026.

“Given the scarcity of available land for development surrounding the RTS station, some parties have also offered to acquire certain old neighbourhoods for redevelopment,” it added.

The firm said Knight Frank also highlighted that planned and incoming supply of serviced apartments amounts to 71,000 units, which is about 57% of the current stock.

“Although the numbers appear somewhat worrying, the supply entering the market should be spread over three to five years,” RHB IB said.

Besides that, RHB IB stated that the expensive rental rates in Singapore had started driving rental demand in the Johor Bahru city centre.

Also driven by the strong Singapore dollar, it said that The Mall, Mid Valley Southkey is very popular among visitors from Singapore.

Based on Knight Frank, RHB IB said rental rates at certain major shopping malls are now on a par with the rates at some shopping malls in the Klang Valley.

“Some strategically located malls in the Johor Bahru city centre, such as Komtar JBCC and R&F Mall, should see a better performance, as greater connectivity and the encouraging prospect of higher shopper traffic should boost their occupancy rates,” it said.

With the Iskandar Malaysia property market gaining momentum, RHB IB said the Malaysian government will likely make further updates on the Johor-Singapore special economic zone, the review of the Malaysia My Second Home programme, and the High-Speed Rail project in the coming months after the recent conclusion of the state elections.

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