Opportunities galore with land swop deal

The historic agreement between Malaysia and Singapore to settle a long-standing railway land swop issue will open up new property development opportunities in Singapore and Iskandar Malaysia, said DTZ Research.

For Singapore, the reversion of the railway land will enable the authorities to amalgamate the track land with adjacent sites and bring about more optimal use of the land, a DTZ report said.

However, DTZ said most of these sites will not be developed upon immediately as some of the adjacent lands are already in use, and that there is no urgency to develop the large tracts of vacant land next to the tracks.

The property consultant added that the railway station site at Tanjong Pagar has the greatest redevelopment potential given its size and the government’s plans for that district.

This includes newly completed and in-the-pipeline offices, hotels and apartments which are pushing rents and prices higher and generating investor interest.

SLP International executive director of research Nicholas Mak said: “The type of residential development that could be coming up at the existing Malaysian railway station will be something that’s similar to inner city living.

“But I do hope that the developers will be building (bigger sized apartments) because currently, many of the so-called inner city apartments tend to be fairly small, typically one-bedroom or two-bedroom”.

Singapore and Malaysia agreed last year, to move the Malaysian railway (KTM) station in Tanjong Pagar to Woodlands Train Checkpoint, near the border, by July 1, 2011.

By 2018, there will be a Rapid Transit Rail System between Singapore and Malaysia served by a single co-located CIQ facility.

According to DTZ Research, the warmer bilateral relations and smoother and cheaper transport system arising from the agreement will also give a boost across all property sectors in Iskandar Malaysia (IM).

In the healthcare sector, the joint development of the iconic wellness township will set a benchmark to raise the international profile of IM to a new level and spur other foreign investors.

More skilled and semi-skilled migrants from other parts of Malaysia could be attracted to reside in IM to take advantage of the employment opportunities in Singapore through daily commute without having to pay for the high residential cost of living in the republic.

Demand for homes from foreign buyers, particularly Singaporeans, is envisaged to improve due to the higher confidence level in IM from the warming bilateral ties.

In the office sector, there is potential for a shift of low-end commercial service activities, namely back office processes, from Singapore into the Johor Bahru CBD to take advantage of cost arbitration.

DTZ added that the railway agreement has unfolded a new chapter for Malaysia and Singapore and both countries can co-build a new growth story that resembles the Hong Kong-Shenzhen Metropolis model.

Source : Channel NewsAsia – 12 Jan 2011