KUALA LUMPUR (July 28): Mass Rapid Transit Corp Sdn Bhd (MRT Corp) on Friday (July 28) inked a memorandum of understanding with Hong Kong's public transport operator and property developer MTR Corp Ltd to undertake a mixed development project on a land adjacent to the Rapid Transit System (RTS) Link's Bukit Chagar station in Johor Bahru.
RTS Link is a cross-border rail link connecting Bukit Chagar to Woodlands in Singapore, with operations scheduled to begin in January 2027.
The mixed development, on a six-acre land with three million square feet of gross floor area, will have a gross development value of at least RM3 billion. The project is expected to take at least five years to complete, with the masterplan to be unveiled by the end of this year.
MRT Corp chief executive officer Datuk Mohd Zarif Hashim said leveraging on the "rail plus property" model adopted by Hong Kong, the intended mixed development is expected to transform the Bukit Chagar station area into an attractive destination for both local and international investors.
“We hope that this MOU will be able to maximise value capture of our RTS link project which is a cross-border transit system between Johor Bahru and Singapore, through the strong support of both governments, Malaysia and Hong Kong,” said Zarif at the MOU signing ceremony.
“MTR is very good at integrating lifestyles with railways. Through this collaboration, both companies aspire to build livable communities at Bukit Chagar through the aggregation of right content such as curating the right retail mix, to meet lifestyle needs, hospitality offerings, healthcare and wellness services, as well as top-class executive education,” he added.
Zarif said MTR is initially playing an advisory role to share its knowledge and experience in the rail plus property model.
Transport Minister Anthony Loke Siew Fook said Bukit Chagar is a potential catalyst for economic growth in the Johor Bahru region and also presents an opportunity to turn the area into a central business district (CBD) in Johor.
“So we envisioned the Bukit Chagar station as not just another rail station but as a catalyst for a CBD, a real CBD in the centre of Johor Bahru, because you have a few acres of prime commercial land and there are a lot of developments in that area. So our vision is to turn that into a high economic zone Johor Bahru,” Loke said.
“It is part and parcel of our strategy to turn Johor Bahru into an important economic city. You have a special financial zone there where the government will give special incentives for companies, special tax rates for professionals working in that area and also a special dedicated lane for immigration clearance for any foreigners working in that area.
"That is our strategy to fully develop that area and RTS is a very important component of that strategy. That is why we are very keen to collaborate with a reputable company from Hong Kong, MTR Corp, purely because they have the expertise and experience of turning a lot of rail projects into economic or multiplier projects,” Loke added.
Speaking to reporters, Zarif said the funding for the mixed development will come from investors.
"This project will be done on a commercial basis and we will get investors to come. The government only chips in the land through MRT Corp," he said.
On the form of ownership by MRT Corp in the development, Zarif said: "This is to be decided, depending on the type of development. But, our side is to own at least 30% and 40% of the overall development."
Meanwhile, MTR Corp's property and international business director David Tang said his company hopes to share its 40 years of experience in developing such projects, and "hopefully help to pilot Johor Bahru as being one of the first rail plus property projects in Malaysia".
Tang said that in Hong Kong, the group does not get funding from the public sector to run its operations and would raise its own funds to build, maintain and upgrade its railway facilities through the "rail plus property" model.
He added: “We have nearly 50% of market share of all public transport, and the Hong Kong government encourages people to use public transport, in particular, the railway. Therefore, we built our communities around alot of our rail facilities.”
MTR Corp is listed on the Stock Exchange of Hong Kong. In addition to its railway operations, the group is also engaged in the development of residential and commercial projects, property leasing and management, advertising, telecommunication services and international consultancy services, the company’s website showed.