KUALA LUMPUR: The Iskandar Malaysia real estate market is optimistic, owing to major developments in Johor and Singapore, particularly the Rapid Transit System (RTS) link.

The RTS link project is a four-kilometre-long railway shuttle link with two stations, one in Bukit Chagar, Johor Bahru, and one in Woodlands, Singapore.

The link will serve as a catalyst for the continued development of Johor Bahru and its surrounding areas. It will increase the value of property in southern Johor.

Malaysia Rapid Transit System Sdn Bhd is the developer and owner of the civil infrastructure for the RTS Link's Malaysian section, which is scheduled to open in 2026.

According to RHB Investment Bank Research (RHB IB), Singapore dollar-driven consumer spending power is expected to have a positive long-term spillover effect on retail, hospitality, and real estate players further out from the city centre.

It believes that projects near the RTS will continue to be in high demand.

According to RHB IB, a few Airbnb operators have also indicated that occupancy rates for the units under management have increased from 70 per cent to 80 per cent on average year to date.

"Based on our conversations with locals there, we learned that the number of visitors from Singapore rose significantly, especially after the post-pandemic re-opening of the Singapore-Malaysia border in April 2022.

"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," said the firm in its recent sector update.

"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.

RHB IB cited examples of two projects in Johor Bahru—W City @ JGCC by WCT Land and Coronation Square—that have seen strong interest from property investors and owner occupiers.

The first phase of the W City @ JGCC project, just a 10-minute drive away (7km) from the RTS station at Bukit Chagar, will make its debut in one to two months, it said.

With an average selling price (ASP) of RM900 per square foot (psf), which is before the discount, the project developer has obtained government approval to sell units priced above RM400,000 to foreigners.

"We think it will be able to garner strong interest from local and international buyers, given its concept, layout, and, more importantly, short distance to the RTS," RHB IB said.

As for Coronation Square, RHB IB noted that the second residential block in the project, which is the closest to the RTS station with a 300-metre skybridge, will be launched soon.

"The first block is already 80 per cent booked, with 60 per cent of the sale and purchase agreements signed. Compared with an ASP of RM1,200 psf for the first tower, the second tower will likely be priced at RM1,300 to RM1,350 psf.

"As for the residential component to be developed by MTR Corp, the ASP is expected to be around RM1,800 psf upon the launch of the project as it will be integrated with the RTS terminal and the customs, immigration, and quarantine (CIQ) complex," it said.

The RM5 billion Coronation Square is the first project to kick-start the Ibrahim International Business District (IIBD), which is the catalyst of the state's transformation plan to turn Johor Bahru into a world-class metropolis.

Scheduled for full completion by 2028, Coronation Square features a mall and six towers comprising two blocks of serviced apartments, two office blocks, a hotel, and medical suites.

Two of the six towers, comprising a 30-storey building to KPJ Healthcare Bhd and a 35-storey block to Bank Rakyat, have been sold for more than RM1,000 psf each.

It was reported that the KPJ Healthcare tower will be ready by the middle of next year, while Bank Rakyat will occupy 29 levels of Menara Bank Rakyat.

The four-star hotel, to be operated by Wyndham Group, will be housed in a 32-storey tower and will have 250 to 300 rooms.