Singapore to Kuala Lumpur high-speed rail – real estate opportunities to come

May 20, 2014 / By  

The proposed high-speed rail between Singapore and Kuala Lumpur is expected to be a game changer when the SGD 15.6 billion project is completed, possibly by 2020. Taking only 90 minutes, the train ride would make travel between the two cities extremely convenient, resulting in significant benefits for both countries.

In 2013, 1.281 million Malaysians visited Singapore, the third largest market by nationality, following China and Indonesia. Visitor arrivals from Malaysia have been increasing at an average of 11.3% per annum over the past ten years, higher than the 9.8% per annum increase in total visitor arrivals for the same period. Malaysia is also one of Singapore’s top trading partners by total trade. The trade volume with Malaysia of SGD 113.6 billion in 2013 was 11.6% of Singapore’s total trade volume. The high-speed rail connectivity is expected to boost travel between the two countries, resulting in significant economic gains for both.

Besides broader economic benefits, the high-speed rail will also have a positive impact on the real estate sector. There are three possible locations for the train terminal in Singapore – the city centre, Tuas West and Jurong East.

Of the three locations, Tuas West, situated at the western coastline, is possibly the lowest cost in terms of construction and inconvenience to the public. However the flip side is the area is predominantly industrial today but it would synergise well with the new port facilities to be relocated there in about 20 years’ time. Jurong East is already a commercial and transportation node and just half an hour to the city centre, it is an ideal location except for the cost of running a rail of some 13 km from the border. The city centre is the least desirable from a cost perspective. It is the most expensive option with some 27 km of track from the boundary, not to mention the inconvenience and overbearing technical challenges of constructing an underground tunnel through what is predominantly a densely built up physical environment.

Whichever option is chosen, there will be investment and development opportunities and values of properties at or near the chosen node will be enhanced. Developers, investors, contractors and other real estate industry players have much to look forward to when the terminal location is decided.

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