HLIB Picks Sunway, UEM Sunrise If RTS Link 2 Kicks Off
HLIB said the proposal, discussed during a meeting between Johor Menteri Besar Datuk Onn Hafiz Ghazi and Singapore Prime Minister Lawrence Wong at The Istana on 31 July, could be a game-changer for the southern economic zone. While details on alignment, stops and timeline are still pending, the plan aligns with the Johor-Singapore Special Economic Zone (JS-SEZ) framework to drive cross-border economic activity and improve workforce mobility.
The research house added that if RTS 2 materialises, Iskandar Puteri could experience a property boom similar to the surge seen near the existing RTS corridor in Johor Bahru, where residential prices doubled in the years leading up to its launch. New launches near the current RTS station command RM1,000–RM1,500 per sq ft, compared to landed projects in Iskandar Puteri like Sunway's Maple Residences launched at RM550 per sq ft in late 2024.
Sunway, with its 669-acre Sunway City Iskandar Puteri township and effective gross development value (GDV) of around RM24 billion, is well-positioned to benefit if the proposed alignment runs nearby. HLIB noted that the township's strategic location and low historical land cost could lead to a doubling of GDV and ultra-high development margins. The expected conversion of Sunway's Medini land to freehold by 3Q25 could further boost values by at least 25%.
UEMS is another key player with 4,662 acres in Johor and an effective GDV of RM58.2 billion, largely in Iskandar Puteri. Enhanced connectivity from RTS 2 could accelerate its project launches and allow a shift from low-density landed housing to higher-density developments, improving land efficiency and returns.
HLIB believes that RTS 2, together with Johor's push for integrated urban development under the JS-SEZ, could catalyse long-term property demand and pricing in the region. The research house reiterated its OVERWEIGHT stance on the property sector, naming IOIPG (BUY; TP: RM4.05), OSK (BUY; TP: RM2.13), Sunway (BUY; TP: RM5.90) and Sime Darby Property (BUY; TP: RM2.05) as its top picks.
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Hong Leong Investment Bank Bhd (HLIB) has maintained its OVERWEIGHT call on the property sector, highlighting Sunway and UEM Sunrise (UEMS) as key beneficiaries of the proposed second Rapid Transit System (RTS 2) between Tuas in Singapore and Iskandar Puteri in Johor. The research house kept its BUY rating on Sunway with a target price of RM5.90 and HOLD on UEMS with a target price of RM0.78, noting that the potential link could significantly uplift property values in the region. HLIB said the proposal, discussed during a meeting between Johor Menteri Besar Datuk Onn Hafiz Ghazi and Singapore Prime Minister Lawrence Wong at The Istana on 31 July, could be a game-changer for the southern economic zone. While details on alignment, stops and timeline are still pending, the plan aligns with the Johor-Singapore Special Economic Zone (JS-SEZ) framework to drive cross-border economic activity and improve workforce mobility. The research house added that if RTS 2 materialises, Iskandar Puteri could experience a property boom similar to the surge seen near the existing RTS corridor in Johor Bahru, where residential prices doubled in the years leading up to its launch. New launches near the current RTS station command RM1,000–RM1,500 per sq ft, compared to landed projects in Iskandar Puteri like Sunway's Maple Residences launched at RM550 per sq ft in late 2024. Sunway, with its 669-acre Sunway City Iskandar Puteri township and effective gross development value (GDV) of around RM24 billion, is well-positioned to benefit if the proposed alignment runs nearby. HLIB noted that the township's strategic location and low historical land cost could lead to a doubling of GDV and ultra-high development margins. The expected conversion of Sunway's Medini land to freehold by 3Q25 could further boost values by at least 25%. UEMS is another key player with 4,662 acres in Johor and an effective GDV of RM58.2 billion, largely in Iskandar Puteri. Enhanced connectivity from RTS 2 could accelerate its project launches and allow a shift from low-density landed housing to higher-density developments, improving land efficiency and returns. HLIB believes that RTS 2, together with Johor's push for integrated urban development under the JS-SEZ, could catalyse long-term property demand and pricing in the region. The research house reiterated its OVERWEIGHT stance on the property sector, naming IOIPG (BUY; TP: RM4.05), OSK (BUY; TP: RM2.13), Sunway (BUY; TP: RM5.90) and Sime Darby Property (BUY; TP: RM2.05) as its top picks.
