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The city-state is still considered the top real estate investment market in the ASEAN region, despite the scrapping of the Singapore-Kuala Lumpur High Speed Rail (HSR) project, reported Singapore Business Review.
“In the near term, we think that Singapore remains the most attractive investment property market in Southeast Asia,” said Colliers International executive director for research Andrew Haskins.
In late-May, Malaysia’s new Prime Minister Dr Mahathir Mohamad said they made a “final decision” to cancel the HSR project due to its huge cost of RM110 billion (S$37 billion), amidst a huge debt of over RM1 trillion (S$337.9 billion).
The new government is also currently reviewing the ongoing RM55 billion (S$18.43 billion) East Coast Rail Link (ECRL), wherein 85 percent of its costs are being funded by China’s China’s Export and Import Bank, with the rest borne by Malaysia.
The ECRL is under scrutiny as its hefty price tag translates to RM80 million (S$26.8 million) per km of rail tracks, compared to an average of RM50 million (S$16.75 million) per km for other existing railway projects in the country.
Haskins said the cancellation of the HSR and the review of the ECRL is unlikely to have a substantial impact on Singapore property investments and China’s One Belt One Road (OBOR) initiative, a plan to create land and maritime trade routes across Asia, Africa and Europe.
While the scrapping of the HSR is “disappointing for the OBOR”, there is still a chance that the Malaysian government would build it in the future.
“In any case, it is possible that the Malaysian government will revisit the plans for both railway lines in the future – perhaps under a new prime minister,” Haskins noted.
Nevertheless, Singapore’s property market is expected to remain healthy this year due to its strong economy and the bright outlook for the private housing market and the office sector.
“We predict Premium and Grade A office rents in Singapore for 2018 to grow 10 percent to 12 percent. This is one of our highest forecasts for office markets in Asia,” added Haskins.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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