Kuala Lumpur’s MRT stations see 10-15% boost in land values
Kuala Lumpur MRT stations see a boost in land values as construction of major infrastructures complete in recent years. The city already hosts an impressive transport network that connects the city center to its two airports and suburbs districts besides intercity linkages that can reach Singapore.
Malaysia’s revival of its infrastructure projects is the catalyst to create a further upside for its economy and real estate market. In the first half of this year, Malaysia saw the revival of several mega projects, including the Bandar Malaysia transport hub development and the East Coast Rail Link (ECRL).
As of July this year, a total of 16 out of 69 infrastructure projects are underway while others are undergoing various stages of implementation. Furthermore, Malaysia will be ready to announce its next set of projects in the coming months ahead, many may be revival of projects paused previously.
The stock index was turned earlier this year when the ECRL was announced to resume. Gamuda, a major contractor in the ECRL and Bandar Malaysia project, has risen 23.5% YTD, now valued at RM 9.5 billion. George Kent’s shares rose 3.2% YTD as a result of the project’s revival. IJM Corp, a major engineering contractor of the ECRL had its shares risen by 53% YTD.
The High Speed Rail Project that links Malaysia and Singapore could be revived with the ECRL setting a precedent. In April, Prime Minister Dr. Mahathir announced the continuation of the ECRL project after a series of negotiations with China, including a 33% cut on costs from RM 65.5 billion to RM 44 million. MIDF reported that the project now, is expected to yield a 2.7% contribution to Malaysia’s GDP. A hive of tourism and accommodation-based constructions of hotels, residences and lodgings along the East Coast have increased. In Kuala Lumpur, transport hubs and stations that are interlinked to the ECRL and the Bandar Malaysia development are predicted to see a similar trend.
Revived projects are expected to be an additional catalyst for the real estate market. In more recent cases, Kuala Lumpur MRT stations have boosted the value of nearby developments. For rail projects, research has shown that at least a 10% -15% gain in land values is common of new and existing properties within 1000 meters of transit stations.