KUALA LUMPUR: Experts have warned property investors against trying to get ahead of the game in purchasing property near mega transport projects, citing risks of station cancellation or relocation that can impact property price value.

Future mega infrastructure projects can be a strong selling point for developers and property agents given that such projects tend to significantly increase the property value and rental rates around the projects.

Malaysia has adopted the transit-oriented development (TOD) concept since 2001, starting with KL Sentral and expanded to Cyberjaya City Centre and PJ Sentral, among others.

TOD is development centred on a rail or bus public transport station.

Projects such as Mass Rapid Transit 3 (MRT3) and KL-Singapore high-speed rail (KL-SG HSR) instill a promise of connectivity are also creating the same pattern to the market value as seen in previous projects.

There are however significant risks to making property investments around these projects that may take several years to even get off the ground.

In fact, these projects also could be realigned or even cancelled at some point during the planning stage after considering the cost, technical challenges as well as public and political pressure.

For example, the East Coast Rail Link (ECRL) project was realigned two times involving the Section C route between Port Klang, Selangor and Mentakab, Pahang.

The first realignment in 2019 was rerouted through Negri Sembilan which shortened the total distance to 640km from 688km while the second change reverted the project to its original plan, making it 665km long now.

As for future projects like MRT3 Circle Line, the routes have been made public, but the alignments are not confirmed yet.

The government will decide on whether to proceed with the KL-SG HSR some time this year.

Transport consultants said such infrastructure projects would take several years before the commencement of construction due to the process involved, alogn with other factors such as economic stability, political climate, and technical challenges.

Transport consultant Wan Agyl Wan Hassan said the complexity of the journey from the announcement of a project to the start of construction involved four phases, including the feasibility studies and planning; approval process; tendering and contract award; and pre-construction activities.

For example, he said, the feasibility studies and planning usually takes one to two years, and the MRT3 project might take longer time due to the densely populated areas it will serve.

"Considering the lessons from MRT1 and MRT2, a more realistic expectation for MRT3's construction to begin might be within four to five years which accounts for potential delays, especially given the complexity and scale of the project," Wan Agyl told Business Times.

The MRT3 Circle Line will be connected to existing MRT, LRT, KTM, and Monorail lines through 10 interchange stations. It will have 32 stations with 22 elevated stations, 7 underground stations and 3 elevated provisional stations.

Transport consultant Rosli Khan said the current stations of the MRT3 alignment could change in the future, factoring in the need to adjust station locations to better serve changing population centres or commercial hubs.

Furthermore, he said feedback from the public or shifts in commuting patterns could lead to adjustments to better meet the needs of the users, especially for deprived areas where certain communities are trapped by overbuilt tolled highways.

Rosli said innovations in construction or transit technology might enable more efficient station placements or designs that were not feasible during the original planning.

Having said that, he said that realignment comes with several potential impacts, especially station accessibility where the previous MRT projects have received backlash.

"Significant criticism has been voiced in the past with regards to poor access for MRT1 and MRT2 where some stations are placed next to highways and passenger's accessibility are much restricted while safety concerns become major issues."This requires new oversight and tight rounds of regulatory approvals, which are notably absence at the moment," he said.

Property overhang reducing TODs around MRT 3?

Transport business consultant YS Chan said there are fewer TODs planned around MRT 3 than the other two MRTs before, given that 50 per cent of the property overhang in the Klang Valley area are for those above RM500,000.

"There is an oversupply of residential and office properties in the Klang Valley, with an overhang of 50 per cent for those valued at RM500,000 and above, which is within the price range of TOD developments."

"The MRT3 is just to complete the rail network in the Klang Valley and can proceed if funds are available. But like most existing office space and luxury condos, the return on investments (ROI) for both MRT3 and its transit-oriented developments (TODs) will be low," he added.

Chan expects lower ridership for MRT3 and lower number of developments around the stations as COVID-19 have changed the way people work, coupled with large corporation's lower appetite to invest in office buildings.

According to him, large corporations are no longer interested investing in huge office buildings, which are more of a liability and no longer seen as prestigious. Chan said the TOD around MRT1 stations saw an equal share of successes and failures.

He said that while the Kuala Lumpur-Singapore High Speed Rail project has not started yet, developers have approached TODs at MRT2 stations with extreme caution.

While the MRT3 project is considered good as a proactive future investment, Rosli warned that overspending on projects in Klang Valley may increase the imbalance in development, suggesting that the funds for MRT3 should be spent in other regions in Malaysia.

"Consideration should be given to review budget allocation for MRT3, to be better spent on the provision of public transport in many other urban areas such as Kota Kinabalu, Johor Bharu, Melaka, Kuantan, Kuala Terengganu and Kota Bharu," he said.

https://www.nst.com.my/business/economy/202...nvestment-risks

This post has been edited by Jazted: Aug 19 2024, 09:30 PM

Tokok experts like they take the Mrt to work everyday ...

Low ridership is as a result of easy financing to car ownership and subsidised petrol .. Idiot expert

True, the key to remove petrol subsidies is to improve public transport. Chicken and egg story.

those who invest thinking MRT / LRT gives more value & advantage...

good luck.

this not singapore or others developed countries.... where even CEO takes Tube / MRT to work

here even 200m walk is consider hardwork

Due to the car industry and Malaysian's love for cars, every family will aspire to get at least one car and tis will be the main mode of transport. However as traffic congestion increases and petrol subsidies gradually removed plus the fact that more people will have to stay further away from their workplaces due to affordability issue, public transport usage will gradually increase. There is a plus factor for TODs but developers and property agents tend to exaggerate it. TOD projects tend to be high density so that's already a negative.

Indeed and many of these TOD projects are built for the rich which they don't usually take the public transportations to commute.

Invest prop in malaysia = invest in malaysia future

Check prop price in taliban.

High rise near mrt stations is nothing new, TOD is a rebranding target novice buyers.

The Unlimited Travel Pass RM50 per month is good. Lot of MNC employees using it. The 1st issue is solve the car park spaces as too many MRT1/2 stations have limited car park spaces.