In a sector update today, the research house made the projection based on anticipated strong demand for projects located close to the RTS, and high spending power among Singaporeans.
“The Singapore dollar-driven consumer spending power is expected to have a positive spillover effect on the retail, hospitality and real estate players further out from the city centre, over time,” said RHB IB.
It has maintained an “overweight” call on the real estate sector, identifying UEM Sunrise Bhd and Sunway Bhd as the major players in the Johor market.
RHB IB remarked that there are promising economic signs following the significant increase in visitors from Singapore following the reopening of the Malaysia-Singapore border in April last year.
“Besides grocery shopping, areas of major spending include food and beverage, wellness and beauty, and car maintenance. Interestingly, property agents are receiving an increasing number of queries from potential Singapore buyers,” it noted.
“We also learned that monthly rental rates for certain condominiums in the city centre started rising to RM5,000 per unit from RM2,500 when borders reopened – to levels on par with rental rates in Kuala Lumpur’s city centre,” it added.
Moving forward, RHB IB said that further catalytic developments may be focused on the Malaysia-Singapore Second Link area as indicated by Johor executive council member for investment, trade, and consumer affairs Lee Ting Han.
“Lee indicated that the Johor-Singapore special economic zone may involve a few specific sectors, and the finalisation of the terms of reference during the upcoming meeting at the end of this month by the two countries’s leaders should facilitate further talks on collaboration,” it noted.
RHB IB said Lee believes that Johor is a beneficiary of the US-China trade war as he had received strong interest from multinational corporations since the borders reopened.
“The fast-lane service has eased the entry of corporations in the digital economy, pharmaceuticals, electrical and electronics, electronics manufacturing services, chemicals and petrochemicals and aerospace sectors,” it said.
As at 4.44pm, Sunway Bhd’s share price was down by two sen or 1.02% at RM1.95, giving it a market capitalisation of RM9.75 billion.
As at 4.51pm, UEM Sunrise’s share price increased by 1.5 sen or 1.9% at 80 sen, giving it a market capitalisation of RM4.07 billion.