KUALA LUMPUR (Oct 9): RHB Investment Bank Research (RHB IB) has maintained its “overweight” stance on the real estate sector, and said UEM Sunrise Bhd and Sunway Bhd are key plays of the Johor theme.

In a sector update on Monday, the research house said projects close to the Rapid Transit System (RTS) should continue to see strong demand, and the Singapore dollar-driven consumer spending power is expected to have positive spillover effects on the retail, hospitality and real estate players further out from the city centre over time.

RHB IB said the number of visitors from Singapore had risen significantly, especially after the post-pandemic reopening of the border in April 2022.

It said besides grocery shopping, areas of major spending include food and beverages, wellness and beauty, and car maintenance. Interestingly, property agents are receiving an increasing number of queries from potential Singapore buyers.

“We also learned that monthly rental rates of certain condominiums in the city centre started rising to RM5,000 per unit from RM2,500, when borders reopened — to levels on a par with rental rates in Kuala Lumpur’s city centre.

“A few Airbnb operators have also indicated that occupancy rates of the units under management have risen to 70%-80% on average year-to-date,” it said.

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

It said with an average selling price of RM900 psf (before the discount), the project developer has obtained government approval to sell units priced above RM400,000 each 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,” it added.

RHB IB also highlighted that during its meeting with Johor state executive council member for investment, trade, and consumer affairs Lee Ting Han, he indicated that the Johor-Singapore special economic zone may involve a few specific sectors, and the finalisation of the terms of reference during the upcoming meeting at the end of this month by the two countries’ leaders should facilitate further talks on collaboration.

It said Lee believes that Johor is a beneficiary of the US-China trade war, as he has been receiving strong interest from multinational corporations since the borders reopened.

“The fast-lane service has eased the entry of corporations in the digital economy, pharmaceuticals, electrical and electronics, electronics manufacturing services, chemicals and petrochemicals, and aerospace sectors,” it said.