KUALA LUMPUR, Feb 8 — Upcoming rail projects in Malaysia will further drive the residential and commercial buildings sector, says BMI Research.
The research firm said in the report that the development is driven by the two largest rail infrastructure projects namely the Singapore-Kuala Lumpur High-Speed Railway (HSR) and the East Coast Rail Link.
“Growth in residential, commercial and industrial construction in Malaysia will receive a boost from ongoing major rail infrastructure projects, which will open up inland, lesser-developed regions to investment and drive higher-value transit-oriented developments,” it said in its outlook report titled BMI Research: Malaysia infrastructure outlook, industry Trend Analysis — Rail Projects To Drive Residential, Non-Residential Development.
The 350km Singapore-Kuala Lumpur HSR which is expected to commence operations in 2026, will spur commercial and residential real estate development along Malaysia’s southwestern coast.
It brings smaller cities along with Malaysia's west coast to within an hour's travel time of Kuala Lumpur which will enhance their investment appeal as the locations of intermediate stops are in underdeveloped suburbs between 10 and 20 kilometres from the existing city centres.
“The terminals located in areas designated as new central business districts, where Bandar Malaysia in Kuala Lumpur will be built on a decommissioned air base, while Jurong East in Singapore will be built on the current site of a golf course,” the report said.
For the 600km, the East Coast Rail Line whose first phase has a planned operating date in 2024 will provide significant capacity increases to the transport network in Peninsular Malaysia by connecting ports, cities and industries along the east coast to Kuala Lumpur and Port Klang in the west.
Currently, there is no rail project served on the east coast and the area is less developed than the west coast. Therefore, the railway is expected to bring numerous industrial zones and ports within hours of time travel of the Kuala Lumpur capital and the country’s main port at Port Klang.
“We believed that the railway is an important component in boosting the attractiveness of wayside industrial and commercial zones, propelling growth in the non-residential building segment well into the next decade,” the statement said.
BMI Research expects that the connectivity improvement will grow at an annual average of 4.7 per cent in real terms between 2018 and 2027.