YTL Corporation Berhad

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#1
High-speed rail will spur growth in hub cities


Rail-link: The Eurostar train link has helped to strengthen economic activities in both London and Paris. — AFP

The Kuala Lumpur-Singapore High Speed Rail (HSR) has been highly anticipated ever since the Malaysian Prime Minister announced in September 2010 the instigation of the HSR connecting the two neighbours. Initiated by YTL Corp Bhd way back in the late 90s, this RM8bil to RM14bil project has so far received mixed views from the public.

HSR has been operating long ago in our Asian counterparts especially in Japan, China, Taiwan and South Korea. For comparison, China’s HSR network by the year 2013 will be at 6,000 km, exceeding Japan’s HSR network of 2,459 km. Last year, in the United States, the Obama administration invested US$8bil in federal stimulus money to create 13 high-speed rail corridors and billions of dollars of new business and tens of thousands of jobs are expected to flow to four hub cities Los Angeles, Chicago, Orlando and Albany, NY where plans for major high-speed rail networks are located.

It was reported at the Conference of Mayors that the benefits of travelling between 110 mph and 220 mph will mean better connectivity, shorter travel times and new development around train stations. The changes will create 150,000 new jobs and some US$19bil in new businesses by 2035. The rail network is also expected to spur tourism, give businesses a wider pool of workers to choose from and help grow technology clusters in cities.

Similar to experiences in other countries, in Malaysia, HSR will also generate substantial economic benefit to both countries, particularly Kuala Lumpur City Centre and the Iskandar region. The availability of HSR will shorten the distance between Malaysia and Singapore in terms of travelling time, hence attracting a larger pool of market catchment to stay in Malaysia and work in Singapore or vice versa. Straddling around 400 km, the proposed HSR will reduce travelling time to Singapore to 90 minutes compared to existing trains which take about seven hours. The significant reduction in travelling time will attract foreign companies to operate in Kuala Lumpur or Iskandar.

While the occupation cost (gross rental rate) for prime office space in KL City Centre range between RM6 per sq ft (psf) and RM8 psf, the cost in Singapore range between RM25 psf and RM30 psf. Meanwhile, the current rental rate in Johor Baru, where most of the buildings are more than ten years old, range from RM1.40 psf to RM3 psf. The low rental market in Johor Baru is hardly surprising as it is mainly domestic-demand driven. With ambitious Iskandar initiatives coupled with various investment friendly policies, the HSR will further augur the Johor Baru office market, hence attracting more MNCs to operate in Johor Baru. Upon completion of the HSR, gross rental rate for new Grade A office towers in Iskandar is expected to hover between RM4.50 psf and RM4.80 psf, 50% to 60% higher than the highest rate achieved in Johor Baru city centre.

Meanwhile, average selling price for existing condominiums in Johor Baru range from RM230 psf to RM370 psf. Capital value for existing condominiums in Johor Baru registered mixed performance from as high as 23% growth while some even noted depreciated values by -19%. Imperial@Puteri Harbour registered the highest selling price at RM400 psf. I believe the HSR will add vibrancy to the high rise properties in Johor Baru. Current average rental rate at RM2 psf in Johor Baru is estimated to increase by 50% to 60% arriving at RM3 psf, which is still below Kuala Lumpur rental rates, averaging at RM4.50 psf. Therefore, it is timely for the HSR to be in place as it will help improve demand from locals and Singaporeans for high-rise residential properties.

The tourism industry has grown favourably, with tourist arrivals increasing from 5.2 million in 1997 to 24.6 million in 2010 in Malaysia and 10.2 million to 11.6 million in Singapore during the same period. The proposed HSR is also expected to create positive impacts to the tourism industry of both nations. With combined tourist arrival of about 35 million coupled with 90 minutes commuting time, Kuala Lumpur-Iskandar-Singapore will be able to position themselves as the transportation hub of South-East Asia as it will provide tourists a wider airline selection to choose from either in KLIA, LCCT or in Changi Airport hence, improving international access to the region. In addition, the HSR in Shanghai and Tokyo are one of the “must see” tourists’ attractions in the respective countries.

Manufacturing will remain as one of the sources of income to both nations. As land in Singapore is becoming scarce with limited land for expansion, coupled with escalating business costs, the HSR would enable some companies to expand or relocate to Malaysia, particularly in the Iskandar region. Moving manufacturing activities to Iskandar would allow the land to be used for even higher value activities. Malaysia’s relatively liberal immigration policies and substantially cheaper labour costs in Iskandar compared to Singapore will reduce the operating costs. The relocation of manufacturing activities to Iskandar via the availability of HSR is expected to raise the contribution of the manufacturing sector to the nation’s GDP by 6.5%.

The closer cross-border link between Malaysia and Singapore will eventually position the region as the first South-East Asian “mega region” similar to Tokyo-Osaka via the Shinkansen Bullet Train, and Shanghai-Hangzhou via the Huhang High Speed Rail among others. While it is noted that existing mega regions are within the same country under the same political driver, with strong political determination, deeper mutual understanding and putting aside all long standing aggravation, Malaysia and Singapore can materialise the idea. We should learn from the European experience; the Eurostar train link has helped to strengthen economic activities in both London and Paris.

In essence, the HSR will economically benefit both nations and strengthen economic ties between the two nations. A larger joint economy will result in larger land area, larger population and larger market, offering greater economies of scale. In addition, larger joint economy with a more diverse mix of skills, types of companies, types of business activities and greater variety of business locations, could accommodate the diversity of talents, business activities, consumer preferences and skill sets. All this will be made possible via improved connectivity by the High Speed Rail, which has been proven to stimulate local economies and act as a driver of growth and thus help spur property prices.

Senator Datuk Abdul Rahim Rahman is executive chairman of Rahim & Co group of companies

OnePropertyNet.com(by DATUK ABDUL RAHIM RAHMAN)
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#2

With all the talk on Iskandar project, the new rail system, Johor looks like got potential for growth.
With Singapore's property prices shooting to the sky, Johor looks like the next place to go.

If not for the flip flop policies, and poor security in the streets, much more Singaporeans would have park their money there, afterall it's only across the causeway, and what more, new fast rail system.

Looks like it's going to be so 'happening' there. So long as Najib is in control! He, and our PM seem to be kawan kawan, progress and development, and win win for both sides.
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#3
(28-06-2011, 11:12 AM)etan Wrote: With all the talk on Iskandar project, the new rail system, Johor looks like got potential for growth.
With Singapore's property prices shooting to the sky, Johor looks like the next place to go.

If not for the flip flop policies, and poor security in the streets, much more Singaporeans would have park their money there, afterall it's only across the causeway, and what more, new fast rail system.

Looks like it's going to be so 'happening' there. So long as Najib is in control! He, and our PM seem to be kawan kawan, progress and development, and win win for both sides.

I think Najib realized that he needs Singapore's help to boost the attractiveness of investment in Malaysia. So he's now willing to accept a mutual beneficial agreements to carry out new plans.

I believe for Iskandar project to work, the Malaysian gov needs to zone out a special economic zone for Singapore companies to self-manage. Else, not easy...





Published June 28, 2011

Temasek, Khazanah to develop 2 sites in Iskandar


50-50 venture to carry out projects valued at an estimated RM3b

By LEE U-WEN

(SINGAPORE) Just over a year after they first joined hands to explore business opportunities in Johor's Iskandar Malaysia, Temasek Holdings and Khazanah Nasional yesterday announced that they have identified two sites where they will carry out major joint development projects.

Collaboration: Singapore's Law and Foreign Minister K Shanmugam (left) and Malaysia's Minister in the Prime Minister's Department Mohamed Yakcop (right)

The first is the Urban Wellness development in Medini North and the other is called the Resort Wellness development in Medini Central.

Temasek and Khazanah revealed in a joint statement that the total gross development value of the two Iskandar sites, with a permitted gross floor area of up to 1.36 million square metres, is estimated at RM3 billion (S$1.2 billion).

The plan is to develop serviced apartments, a corporate training centre and commercial, retail, residential and wellness-related facilities on these sites.

The iconic development will be carried out by a 50-50 joint venture between Temasek and Khazanah.

The two sovereign wealth funds are currently in negotiations with potential partners and operators for the various components to maximise the commercial potential of the sites.

According to the statement, planning and design works for the Iskandar projects started earlier this year, with the next steps towards design and further implementation set to take place over the next five years.

Medini North is already home to many large-scale projects, including Southeast Asia's first-ever Legoland theme park and the Lifestyle Retail Mall, the largest retail centre in South Malaysia.

The site in Medini North is purely for commercial facilities and covers about 65,000 square metres. The development in Medini Central, however, is much larger at 1.3 million square metres and is zoned for both commercial and residential purposes.

'The development in Iskandar with Temasek will be highly complementary and builds on the momentum of existing and planned projects in Iskandar Malaysia, in which Khazanah has been involved since 2006,' said Khazanah's managing director Azman Hj Mokhtar.

According to a joint statement issued by the Singapore and Malaysia governments, Temasek and Khazanah will also jointly consider other potential commercially viable developments in Iskandar.

The Iskandar deal is part of a wide-ranging agreement that will see both countries take their bilateral ties further.

This after the leaders of the two governments hailed what they described as an 'historical breakthrough' to officially seal the Points of Agreement (POA) on Malayan Railway (KTM) land in Singapore, a long-standing issue that has dogged bilateral relations for the last two decades.

In the joint statement, Singapore Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak announced that a written instrument had been put together and approved by both governments yesterday in Kuala Lumpur.

The document - signed by Malaysia's Minister in the Prime Minister's Department Mohamed Yakcop and Singapore's Law and Foreign Minister K Shanmugam - summed up several key proposals that their governments had earlier agreed to work together on.

Come 2018, Singapore and Malaysia will operate a new cross-border mass rail line that will run from a station near Republic Polytechnic in Woodlands to another station in the vicinity of JB Sentral in Johor Bahru.

This rapid transit link will have a shared customs, immigration and quarantine facility in Singapore and one in Johor to allow train commuters to clear immigration just once for each way of travel.

A technical workgroup has been formed to call a tender later this year for a consultancy study that will develop possible alignments and proposals for the railway link.

The statement also noted that Singapore is on track to take control of the historic Tanjong Pagar Railway Station and relocate it to the Woodlands Train Checkpoint (WTCP) this Friday.

The Republic will also take charge of several parcels of railway land previously owned by Malaysia for decades. In return, Malaysia will receive six land parcels in the Marina South and Ophir-Rochor areas in Singapore.

As part of the deal, Singapore will ensure proper bus and taxi services at the Woodlands Train Checkpoint to a nearby MRT station for the convenience of train commuters, said the joint statement.

Already, the Land Transport Authority has increased the number of taxi bays at WCTP from two to five, and lengthened the bus bay and shelter there.

Also on schedule is the implementation of the work plan to hand over the waterworks under the 1961 Water Agreement by Singapore free of charge and as a matter of goodwill after the deal expires on Aug 31 this year.
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#4
(28-06-2011, 01:21 PM)Thriftville Wrote:
(28-06-2011, 11:12 AM)etan Wrote: With all the talk on Iskandar project, the new rail system, Johor looks like got potential for growth.
With Singapore's property prices shooting to the sky, Johor looks like the next place to go.

If not for the flip flop policies, and poor security in the streets, much more Singaporeans would have park their money there, afterall it's only across the causeway, and what more, new fast rail system.

Looks like it's going to be so 'happening' there. So long as Najib is in control! He, and our PM seem to be kawan kawan, progress and development, and win win for both sides.

I think Najib realized that he needs Singapore's help to boost the attractiveness of investment in Malaysia. So he's now willing to accept a mutual beneficial agreements to carry out new plans.

I believe for Iskandar project to work, the Malaysian gov needs to zone out a special economic zone for Singapore companies to self-manage. Else, not easy...





Published June 28, 2011

Temasek, Khazanah to develop 2 sites in Iskandar


50-50 venture to carry out projects valued at an estimated RM3b

By LEE U-WEN

(

It gets my adrenalin going whenever I read such articles!

Just feel that I want to be part of it! But how to for a small fry like me?

Projects undertaken by 2 governments - must be sort of very big scale!

One thing for sure, it's gonna be more interesting than our local scene here!

I guess in time to come, some local industries might be pushed to the north.

When you mentioned this:

~I believe for Iskandar project to work, the Malaysian gov needs to zone out a special economic zone for Singapore companies to self-manage. Else, not easy...~

Are you referring to something similar to Suzhou Industrial Park management? It's not surprising if they agree to our condition!
Afterall, they need our expertise, and we need their land!





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#5
Quote:When you mentioned this:

~I believe for Iskandar project to work, the Malaysian gov needs to zone out a special economic zone for Singapore companies to self-manage. Else, not easy...~

Are you referring to something similar to Suzhou Industrial Park management? It's not surprising if they agree to our condition!
Afterall, they need our expertise, and we need their land!

Hey etan, yeah you're right! If Malaysia gov doesn't agree to Singapore's condition, I don't think Singapore companies dare to venture over there. Reason being, Malaysia doesn't have any reputation in managing project of such scale. So far, I've seen some medical companies and raffles education planning to go there.

Such mega project may sound exciting, but if you're interested to invest in them via property or shares, better do more due diligence before committing. It's a big bet to me!
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#6
(28-06-2011, 02:31 PM)Thriftville Wrote:
Quote:When you mentioned this:

~I believe for Iskandar project to work, the Malaysian gov needs to zone out a special economic zone for Singapore companies to self-manage. Else, not easy...~

Are you referring to something similar to Suzhou Industrial Park management? It's not surprising if they agree to our condition!
Afterall, they need our expertise, and we need their land!

Hey etan, yeah you're right! If Malaysia gov doesn't agree to Singapore's condition, I don't think Singapore companies dare to venture over there. Reason being, Malaysia doesn't have any reputation in managing project of such scale.

Such mega project may sound exciting, but if you're interested to invest in them via property or shares, better do more due diligence before committing. It's a big bet to me!

Yes, I know, anyway thanks for yr advice, Thriftville.

The exchange rate is just too good to draw me there! Look see look see only lah. Am still very concerned whether can really put money there or not.
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