PETALING JAYA: The Johor Bahru-Singapore Rapid Transit System (RTS) Link and a robust Singapore dollar have boosted prices for high-rise properties and rental costs for shopping malls in Johor Bahru’s city centre, bringing them in line with rates in the Klang Valley.

In a note today, RHB Investment Bank Bhd (RHB IB) gave an “overweight” outlook for the market, along with “buy” recommendations for its favoured selections – UEM Sunrise Bhd with a target price (TP) of 92 sen, IOI Properties Group Bhd with a TP of RM1.46, and Matrix Concepts Holdings Bhd with a TP of RM1.75.

Drawing insights from real estate agency Knight Frank Malaysia, it disclosed a significant surge of infrastructure initiatives, real estate undertakings, facility enhancements, and financial commitments are “brewing” within Iskandar Malaysia, the grouping of major cities in Johor.

Knight Frank has reported properties around the RTS Link, scheduled for completion by the end of 2026, have seen transactions for several high-rise projects reaching between RM900 and RM1,100 per square foot, which closely mirror property values in the Klang Valley.

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

It said Knight Frank revealed that there are around 71,000 planned and incoming serviced apartment units, making up 57% of the current stock.

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

Cross-border catalyst fuels demand

The escalating rental prices in Singapore have initiated a surge in rental inquiries within the central area of Johor Bahru.

Bolstered by the robust Singapore dollar, The Mall at Mid Valley Southkey has gained significant popularity among Singaporean visitors.

As per Knight Frank data, RHB IB reported rental prices at selected prominent shopping centres in the city have reached a level comparable to those observed at certain Klang Valley malls.

“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.

The research house anticipates forthcoming updates from the Malaysian government on the Johor-Singapore special economic zone, potential revisions to the Malaysia My Second Home programme, and progress concerning the High-Speed Rail project in the aftermath of the recent state elections.