The game-changing project has been hit with a series of delays since the newly minted Pakatan Harapan government took power last May. With the property market in Iskandar Malaysia already in doldrums, we analyse the possible impact this may have on real estate on both sides of the causeway.
By Khalil Adis
When Pakatan Harapan took power in a landslide victory at the Malaysian general election last May, the ruling coalition government went to work by immediately addressing one of its election manifestos - reviewing major infrastructure projects which involve a foreign country.
Singapore was no exception.
Iskandar Malaysia, which was already feeling the heat from the sluggish property market, saw the High Speed Rail project at first being cancelled and then postponed.
Meanwhile, the controversial Forest City project bordering Singapore was initially announced as off-limits to foreigners but was subsequently changed to build affordable homes for locals.
The former is an important impetus that many developers had banked on to move their inventory amid a severe housing glut the state is facing.
According to recent data provided by the Valuation and Property Services Department (JPPH), Johor recorded the highest number of residential overhang at 13,767 units followed by Selangor and Kuala Lumpur at 7,233 and 5,114 units respectively.
The mismatch in the supply for homes versus what Johoreans can actually afford plus their inability to get financing have further exacerbated the property market situation in Iskandar Malaysia.
The only saving grace is the cross-border rail link service linking Woodlands and Johor Bahru.
Although not cancelled, the Johor Bahru-Singapore Rapid Transit System (RTS) link project is "not progressing well” as Transport Minister Khaw Boon Wan puts it.
Just last week, Acting Transport Minister Dr Vivian Balakrishnan gave an update in Parliament that “further delays” are likely as Malaysia had missed the deadline in confirming its partner three times - first until September 2018, then until December.
However, on December 28, Malaysia had asked to be given until February 28 this year to do so.
It had missed this deadline as well.
As a result, this will delay the opening of the link which was initially scheduled to be ready by December 31, 2024.
Some developers, particularly in the JB Sentral area, had banked on the RTS Link, to move their unsold units.
With the project now in limbo, here are the possible impacts on the property market both in Singapore and Johor:
#1: Possible higher development cost around Woodlands North station
In May 2012, it was announced that AECOM Technology has been awarded a US$42m contract for the design and engineering study of the RTS Link by Malaysia’s Land Public Transport Commission and Singapore’s Land Transport Authority (LTA).
Under the deal, the company will provide an architectural and engineering consultancy study for the proposed RTS Link.
Construction is well underway for the Thomson-East Coast MRT Line (TEL) with a plot of land allocated for the link at Woodlands North station.
The station is slated to be opened in December this year.
The Urban Redevelopment Authority’s (URA) master plan for Woodlands North Coast shows a mixed-use precinct for office and business parks along signature green boulevards within the station’s immediate vicinity.
The delay could mean higher development cost for the terminus due to opportunity costs and inflation.
#2: Higher fares
The higher development cost arising from the construction delay could also mean higher fares for the RTS Link which may be passed on to consumers.
However, whether or not this happens, commuters will likely switch to taking the RTS Link across the causeway as it will mean greater convenience as opposed to driving in or taking the bus.
For example, commuters need to clear customs and immigration only once when they depart from either Singapore or Malaysia.
Using one’s own vehicle or taking the bus will require a two times clearance with the possibility of being stuck in traffic.
#3: Potential capital appreciation for existing housing developments near Bukit Chagar RTS station affected
The Bukit Chagar RTS station will be located at the open car park next to the Sultan Iskandar Building complex.
Surrounding the station are landed terrace homes and condominium towers TriTower Residence and Bukit Chagar Apartments.
According to data from Brickz, from May 2017 to Jan 2018, the average per sq ft pricing for the landed homes in the area was RM354 per sq ft.
Meanwhile, the average per sq ft transacted pricing for Bukit Chagar Apartments from Mar 2017 to Dec 2017 was RM395 per sq ft.
There is no data for TriTower Residence built by SKS Group, formerly known as Maha Builders Group or MB Group.
With the delay, the potential capital appreciation arising from the spillover impact from the RTS Link will take a longer period beyond 2024.
Despite this, market talk is SKS Group has plans to build a covered link to the Bukit Chagar RTS station.
If this is true, investors of TriTower Residence will stand to benefit the most.
#4: Developments around JB Sentral affected
The delay will also impact surrounding developments in JB Sentral as it will mean longer gestation period for the commercial, property and tourism sectors.
The game-changing project could provide a much-needed boost to complement Johor Bahru’s ambitious RM1.8 billion rejuvenation programme that was unveiled by former Malaysian Prime Minister Najib Razak in 2010.
This is because it will bring an inflow of investments from Singapore that will benefit the sectors mentioned.
Although the Sungai Segget rehabilitation is now completed, the project proved to be quite a letdown.
The project was spearheaded by the Iskandar Regional Development Authority (IRDA) with a reportedly whopping RM20 million consultation fee.
The entire cost is an estimated RM57 million.
The project was supposed to provide a booster to the nearby malls such as Johor Bahru City Square and KOMTAR JBCC as well as shophouses.
It was also supposed to be a tourist attraction much like Clarke Quay as it was modelled after South Korea’s Cheonggyecheon river restoration project in South Korea.
This explains why developers like UMLand had acquired land banks near to Jalan Wong Ah Fook for the opening of Suasana Iskandar Malaysia.
Given the high cost, naturally, the expectation among stakeholders was high.
However, some developers, shop owners and retailers were reportedly not very happy about the way the river cleaning project had turned out.
While the river no longer emits an odour, littering is still common.
The only saving grace for the river is a miserable small fish pond with a fountain in the middle of it.
Surely the river rejuvenation project can do much better.
#5: Ibrahim International District as the potential jewel of Johor
Delays and disappointments aside, there is a gateway district coming up in Johor Bahru that will mirror the one at Woodlands North station.
Called Ibrahim International District, the project is named after the Sultan of Johor.
Under his auspices and blessings, His Majesty has set the target of making Johor Baru the second biggest city in Malaysia after Kuala Lumpur.
As such, we can be sure the project will receive the state’s 110 per cent commitment to make it shine as the jewel of Johor.
With a gross development value of RM3 billion, Ibrahim International District is an ambitious mixed-use development that will comprise six towers -– a hotel, a hotel with residences, an office, medical suites high-rise and two serviced apartment towers and a mall with an estimated gross floor area of 80,000 sq ft.
The district is currently under construction.
There are plans to build a linkway from Persada Johor to Coronation Square at Ibrahim International District.
However, there is no word yet if the district will be connected to the future Bukit Chagar RTS station.
If it does, it will enhance property values in the area, albeit beyond 2024.
#6: One Bukit Senyum as the current property booster
Nevertheless, there is light at the end of the tunnel as the only property booster around JB Sentral is the One Bukit Senyum project by Singapore Exchange-listed Astaka Holdings Limited.
Home to the tallest residential towers in Southeast Asia, Astaka, One Bukit Senyum will be Johor Bahru’s new central business district when fully completed in 2021.
One Bukit Senyum will be developed in two phases.
The first comprises The Astaka, with a total of 438 units.
The development, which is Johor’s most luxurious condominium development by far, was completed late last year.
Phase two will comprise Johor Bahru City Council’s new headquarters, a 450-room five-star hotel, 1012 residences, 254-key serviced apartments, a 1.5 million square feet shopping mall and a Grade A office building.
The JB-Woodlands RTS Link is a complicated matter as it involves the state and federal governments.
Nevertheless, it will be a win-win situation for both Singapore and Malaysia to continue with the project as it will mean and inflow of investments, particularly for Johor.
It will also ease the daily commute among Johoreans who are working in Singapore.
The spirit of good neighbourliness should prevail.
A vibrant district is about to take shape over at Woodlands Regional Centre in the next 15 years with enhanced connectivity to Johor Bahru via the Rapid Transit System (RTS) Link. We give you the quick low-down on this gateway district to Singapore.
By Khalil Adis
Living in Woodlands is about to get even more exciting as Woodlands Regional Centre will be developed into a sizeable commercial hub and bring jobs closer to homes in the northern region of Singapore.
Comprising 100 hectares of land, the Urban Redevelopment Authority (URA) envisages Woodlands Regional Centre to become home to new spaces for industry, research and development, learning and innovation over the next 15 years.
Just last month, the URA released a white site for sale under the reserve list of the second half of 2018 Government Land Sales (GLS) Programme.
A white site means it can be used for different functions such as commercial, residential and industrial.
The sale of the site is especially momentous as it will provide a seamless connection for commuters travelling to Johor Bahru via the RTS Link by 2024 at Woodlands North MRT station before disembarking at Bukit Chagar station.
Here are a few quick facts on the site:
#1: Located next to popular shopping mall, Causeway Point
The site is located within Woodlands Regional Centre which comprises two complementary precincts - Woodlands Central and Woodlands North Coast.
The white site itself is located at Woodlands Central which the URA said will be transformed into a bustling commercial and community node with a mix of office, retail, residential and attractive public spaces for live, work and play.
#2: A vibrant mixed-use site with a GFA of 115,000 m2
The mixed-use site measures 2.75ha and can potentially generate some 115,000 m2 of gross floor area (GFA) for office, residential, retail and entertainment uses.
At least 45,000 m2 of the maximum permissible GFA of the development will be set aside for office use.
Meanwhile, the URA said the remaining GFA can be for additional office, retail, entertainment and residential uses.
#3: 27,000 households in northern Singapore set to benefit
According to the URA, the new public spaces planned for the precinct can be enjoyed by more than 27,000 households in the vicinity.
Woodlands Central will also serve as a community gathering point for the residents in Woodlands and the rest of the north region.
#4: Strategically located above the upcoming Woodlands Thomson East Coast Line (TEL) station, (TE2)
The site is planned to be seamlessly connected to the existing Woodlands MRT station.
As such, the site will enjoy a direct connection to both the Thomson East Coast Line (TEL) and the North South Line (NSL) via the Woodlands TEL station, (TE2).
From the TE2 station, commuters can hop onto the RTS Link at Woodlands North MRT station located one stop away to Bukit Chagar station in Johor Bahru.
#5: Direct basement connection to TE2 station
The new development will have a direct basement connection to the future Woodlands TEL station, providing shoppers and commuters with easy access to the rest of the stations under the TEL.
This includes the Central Business District, Marina Bay and the shopping, dining and entertainment options at Orchard Road.
#6: 100,000 new jobs
When fully developed, Woodlands Regional Centre will have about 700,000m2 of commercial space and offer approximately 100,000 new jobs.
#7: Innovation district at Woodlands North Coast
Meanwhile, a mixed-use business cluster will be coming up at Woodlands North Coast which will include future industrial and business park spaces.
Woodlands North Coast will be served by the Woodlands North MRT station
The URA has envisioned it to provide flexible workspaces that encourage experimentation and innovation and are geared towards the needs of both small to medium enterprises and multinational companies.
As we can see from the infographics above, prices of HDB resale flats across the board have fallen except for executive flats.
However, the upcoming TEL and developments at Woodlands Regional Centre will act as a property booster for homes in the area.
The opening of Woodlands TEL station and Woodlands North MRT station will be the first property booster followed by the rest of the developments that are being planned.
Homeowners of 3-, 4- and 5-room HDB flats should hold on tight to their properties in the next 15 years before selling.
Meanwhile, it is a good opportunity for home buyers to start their property hunt in Woodlands and wait for the capital appreciation as Woodlands Regional Centre becomes more mature.
As for the RTS Link, the Malaysian government has remained committed on completing this project.
In fact, this is one of the major infrastructure project that will be carried on under the newly elected Pakatan Harapan government.
For a detailed master plan of Woodlands Regional Centre, do check out the URA site here
An independent analysis from yours truly