KUALA LUMPUR (Oct 5): The Johor Bahru retail market landscape is poised for exciting growth with the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link, which is expected to transport around 10,000 passengers per hour in each direction, according to Allan Soo RE Consultants principal, Allan Soo.

In the presentation in Johor Bahru Retail Market Conference 2023 held in Kuala Lumpur on Thursday, Soo shared that the overall retail market in Malaysia started slowing down in 2Q2023. However, it is on the uptrend in Johor Bahru, thanks to the large primary catchment population of 1.08 million in the metro areas and Singaporeans, who make up at least another half a million of catchment population.

“It is supported by a secondary catchment population in the suburbs of 700,000. The city centre also benefits from a transient, travelers crowd, both from Johor and other states. The daily crossings (between Singapore and Johor Bahru) are 320,000. It is one of the busiest international crossings in the world. When the RTS is ready, the number will be even greater. There is no other (retail) market like this,” he shared.

Soo also highlighted that the Johor Bahru and Singapore retail markets should be seen as one although they are in two countries. “Many Singaporeans look at Johor Bahru as a suburb and a playground. It is evidenced by the influx of Singapore shoppers and holidaymakers into JB despite massive jams in the causeway during public holidays and festivals.”

He added that the average rental for prime shopping malls in Johor Bahru was stable in 2022 and started rising in 2023. KOMTAR JBCC is one of the good examples.

“The rent for retail malls in JB ranges from RM10 to RM13 psf per month in 2023. For ground-floor prime lots, it goes up to RM22 to RM35 psf per month, similar to some malls in the Klang Valley. The GTO (gross turnover) of KOMTAR JBCC is rising to pre-Covid levels and I am confident it will return to its pre-Covid level, if not better, soon, owing to its location on Jalan Wong Ah Fook in the very prime location of JB,” he shared.

Soo explained that footfall is crucial to the success of a retail mall despite location still being the golden mantra. That is why he believes the outlook for KOMTAR JBCC and JB City Square, which are both located a stone’s throw from the upcoming Bukit Chagar RTS Station, is positive and bright.

“The RTS is scheduled to be ready in December 2026. It will bring 10,000 passengers per hour from Singapore. The current footfall in KOMTAR JBCC is 25,000 per day on weekdays and 40,000 per day on weekends. I foresee JBCC will have a significant increase in footfall as it stands to benefit most with its direct link to the RTS,” he said.

In the conference, Al-Salam Real Estate Investment Trust (Al-Salam REIT), the owner of KOMTAR JBCC, also announced that a pedestrian overhead bridge will be built to connect Bukit Chagar RTS station and KOMTAR JBCC, as well as a revamp of its retail space through various asset enhancement initiatives, including the creation of an al fresco dining area, reconfiguration of floor space to accommodate commercial upscaling, and the rejuvenation of the mall’s internal ambiance and external façade.

While the investment amount was not disclosed, Al-Salam REIT said it will implement a private placement exercise to raise funds in the medium term.