The Malaysian Insight reported yesterday (13 Dec) that Malaysia will proceed with the long-delayed high-speed rail (HSR) project without Singapore. The track will end in Johor instead.
Citing an anonymous source, Malaysian Insight said that Malaysia was prepared to pay Singapore RM300 million (S$100 million) in compensation to go alone.
In May 2018, the HSR project faced its first set back when then-Malaysian Prime Minister Mahathir Mohamad announced that Malaysia will be dropping the project, citing the project’s huge costs. This announcement came after Mahathir’s Pakatan Harapan coalition won the 14th Malaysian general election 2 years ago.
After some back and forth, the project was later deferred, with both countries signing an agreement to delay it for two years.
In June 2020, Singapore and Malaysia agreed once again to defer the HSR project till the end of this year, after Malaysia requested another seven-month extension. The Malaysia Insight’s report came with 2 weeks to go before the end of 2020 deadline is up.
Impact on property prices at Jurong East
The original plan is to have the Singapore terminus of HSR built in Jurong East at the former Jurong Country Club site.
Many people have rushed in to buy up properties in Jurong East hoping that prices would increase quickly when the terminus is built. However, if the terminus is now moved to Johor, property prices at Jurong East will unlikely to increase as quickly as expected.
Investments in commercial properties in Jurong East will likely to be affected also, since the expected large influx of Malaysian workers and tourists will not materialize. Those who have invested in small retail units, and are banking on day trippers from Malaysia may have to moderate their expectations accordingly.
Developers will also be more careful with their bid price in the area if the terminus will not be built in Singapore anymore.
Cheers all around with HSR announcement in 2015
In 2015, when it was first announced that Singapore terminus would be built at Jurong East, there were loud cheers all around.
At the time, Prime Minister Lee Hsien Loong explained why Jurong East was chosen. He said the area is a developing regional centre with offices, hotels, shops and restaurants, as well as factories that are not so far away. He added that his government intended to make Jurong East the second CBD.
Then, property experts were expecting a huge multiplier effect on the economy of the Jurong East area with HSR.
“This could be the most important and final piece of the puzzle to seal Jurong Gateway’s status as a regional commercial hub, the same way that Tampines has the airport and Woodlands the Causeway link,” said Desmond Sim, head of Singapore and South-east Asia at CBRE Research.
JLL national research director Ong Teck Hui added that increased commercial activity would boost land and property values at Jurong East. “Developers and home buyers who have invested in Jurong East in the last few years will be rejoicing; it will be ‘Boomtown Charlie’ for them,” he said.
Donald Han, managing director of Chesterton Singapore, commented that there would be higher residential rental demand and more economy hotels springing up to tailor to Malaysians coming to work in the new business district.
Christine Li, research head at Cushman & Wakefield, said the area will become the “most ideal suburban location for company headquarters” for firms in the business services, education and science and technology sectors that have or will have businesses in Malaysia.