The Kuala Lumpur-Singapore High Speed Rail (HSR) could have far-reaching impact that will not only benefit existing and future properties along its route.
According to CIMB Research, the upcoming rail link that will offer a direct link between the Malaysian capital and the Island Republic could potentially boost the valuations of planters’ land bank due to property development potential.
It said organisations such as Sime Darby Bhd, Genting Plantations Bhd (GENP) and Kuala Lumpur Kepong Bhd (KLK) have their own property arm to develop the land, but they may also selectively sell some of the land to unlock value.
The Russian-made high-speed train that will likely be utilised on our shores.
This can also help enhance their near-term earnings via land sale gains, CIMB Research said.
It pointed out that the rise in land values from the spillover of the HSR projects will likely differ for the seven terminals along the Malaysian stretch.
“The improvements in property values will depend on the population of the area, connectivity to the final destination, and pricing of the tickets,” said CIMB Research.
In a poll taken during the symposium on HSR, the research firm said the audience ranked Greater KL as the preferred location to buy properties, followed by Seremban and Iskandar Puteri, among the seven HSR stations.
Among the key expected beneficiaries is Sime Darby as proposed stations are likely to be located in Labu and Pagoh, where Sime has about 15,000 acres of land.
Meanwhile, GENP is touted to be another beneficiary as the Batu Pahat station could be located in its Pura Kencana project.
KLK stands to benefit from its joint venture with UEM in Iskandar as the Iskandar Puteri station may be located in its project. KLK has a 60 per cent stake in this project with a land area of 202ha.
The spillover benefits from the rise in land value from the HSR project are long term as the project would only be completed in 2026.
Malaysia and Singapore had signed a memorandum of understanding last month to begin work on the HSR operations. Both parties have agreed that 350km rail line will have eight stations, with the main terminals in Bandar Malaysia (Kuala Lumpur) and Singapore.
The project has an estimated cost of between RM50 billion and RM60 billion.