High Hopes For HSR?

The hope for the connection between these two economies is so that they support and strengthen one another

Malaysia aspires to be a developed nation, and progress so far is looking good on our side. With immaculate buildings and signs of glory such as the Petronas Twin Towers, we strive still to be at par with other developed nations, and exhibit A of that is the new Singapore-Kuala Lumpur High Speed Rail (HSR) that is still in its planning stages which will not only connect us with Singapore, but possibly boost our economy. This month we extract the property aspect of the HSR.

The precise locations of the other six Singapore-KL high speed rail (HSR) stations have yet to be fixed, with the exception of Bandar Malaysia and Jurong East in Singapore. MyHSR Corporation Sdn Bhd (MyHSR Corp), the project delivery company, claims Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Iskandar Puteri would have HSR stations, the exact locations of the six stations however, were still subject to change. The HSR line will run for 350km, with 335km in Malaysia and 15km in Singapore, and on two tracks going in opposite directions.

The hope for the connection between these two economies is so that they support and strengthen one another. However, when compared to other HSR systems, only those such as Japan and South Korea have benefitted their respective countries due to the focus on urban development more than profitability such as the case of the Eurostar that links London and Paris and Brussels which took years to turn a profit.

“Tourism arrivals will benefit as greater connectivity will promote easier tourism access via the HSR and there will be increased opportunities as there will be more Malaysian working in Singapore with higher pay as compared to local Malaysians,” says Principal Director of REKARANCANG SDN BHD, Nik Mohd Ruiz Razy. “However, in terms of our air carriers it may not be a good idea as it may not work well as there will be preference to use Changi and carriers flying to Changi as they have greater connectivity and frequency options,” he continues. This is made in reference to the Sabena and Brussel Airport which suffered significantly when the rail from Brussel was connected to Amsterdam via Schipol.

Khalil Adis, founder of Khalil Adis Consultancy and author of ‘Property Buying for Gen Y’ says that the HSR will definitely increase the property value surrounding the HSR stations, especially what he has already seen in Jurong. “Now you can already see the asking prices for property is reflective of what is to come. Definitely a game changer due to the increase in infrastructure, master plans and industries like tourism, retail, and even the new Central Business District (CBD) coming up,” he exclaims. “Property especially in Jurong used to be seen as an industrial area as opposed to the financial centre it is deemed as now. It is now a highly desirable area that brings in a lot of traffic, and that is great for the property market,” he continues.

From Ruiz’s point of view, he foresees an interest in KL residential properties as there will be demand for people to work in Singapore and live in Malaysia as cost of living is cheaper in Malaysia which definitely includes the along the HSR. “Even office spaces will likely be a challenge and the fact that growth for spaces for offices these days are compromised with opportunities to work at home and the advancement of technology,” Ruiz shares. He adds that even retail spaces may see continuous demand as there are more opportunities and spending power, as per the aforementioned.

Even as an investor, Khalil Adis says he would advise to look into investing in Bandar Malaysia as it will be a bigger and better KL Sentral. “The only options we have now are to take flights, but even then, you waste two hours checking in, let’s not even talk about spending an extra RM55 every time you want to get to KLIA 1 or 2,” he explains. The HSR will alleviate all these problems and get passengers where they need to be in 90 minutes, assuming you’re heading to Jurong from Bandar Malaysia.

The problem with all this development and increase in property value, however, seems to be the cyclical issue we have even in Kuala Lumpur. As explained by Ruiz, the increase in residential demand will make homes more expensive and more difficult for locals to attain. “Even if we don’t talk about homes, and living in these areas, the cost of living itself will definitely increase for these hotspots and this will be a challenge for the local community whom work locally,” he adds.

From an architects’ perspective, Khalil Khalid from ROA achitectural firm says the HSR project is a much needed infrastructure project but requires proper implementation in order to integrate well with the places and communities it will serve. “While Jurong – Bandar Malaysia is the main highlight, the areas in between this route will need more attention – intermediate stations such as Seremban, Ayer Keroh and Muar,” he says. In hindsight, the project will attract new residential development, thus raising the value of nearby properties since the reduction in commuting costs. The problem with that is the assumption that the value of surrounding land will increase, thus causing everyone to join the bandwagon failing to account local contexts such as pedestrian connectivity, public realms and neighbourhood facilities that will actually unleash the full potential of transit oriented developments.

From an investor’s point of view, it is safe to say the HSR will bring you great value to properties in nearby HSR stations. However, it does seem like quite a challenge as a local just trying to buy a home. The question is, are we ready for such a drastic advancement when we do not even have a properly maintained railway system in our own country? As a town planner, Ruiz prefers the HSR being confined within Malaysia with Johor Bahru or Iskandar Puteri as the last stop in Peninsular Malaysia instead of Singapore.

Economically, we would be able to tap into a larger, more diverse market with the high-speed rail. “Singapore is an international hub and we have a lot of MNC’s so for them to be able to have such great access to Malaysia would be a great plus,” shares Khalil Adis on the pros of the HSR. What can be done is an independent detailed analysis on the GDP and economic impact of the HSR without any political influence, according to Ruiz. Like any other anchor in an area, the HSR will create jobs and flourish the local economy, according to Tan Sri Dato’ Dr. Lin See-Yan, Former Deputy Governor of Bank Negara Malaysia. “It creates more jobs and the spillover effect will significantly increase across the HSR. The easiest example is the ease of people from Seremban to work in Kuala Lumpur, so it enhances the quality in our country as well.”