The retail market in Johor Bahru is poised for significant growth, driven by the upcoming Johor-Singapore Rapid Transit System (RTS) Link. The RTS Link is expected to transport approximately 10,000 passengers per hour in each direction, providing a substantial boost to the region’s economy.
Allan Soo RE Consultants principal, Allan Soo, shared these insights during the Johor Bahru Retail Market Conference 2023 in Kuala Lumpur. Soo noted that while the overall retail market in Malaysia experienced a slowdown in the second quarter of 2023, Johor Bahru is bucking this trend, thanks to its large primary catchment population of 1.08 million in the metro areas and an additional half a million from Singapore.
Soo emphasized that Johor Bahru and Singapore should be considered as a single retail market despite being in two different countries. Many Singaporeans view Johor Bahru as a suburb and a playground, leading to a consistent influx of Singaporean shoppers and holidaymakers into the city, even during periods of heavy traffic congestion at the causeway.
In terms of rental rates, prime shopping malls in Johor Bahru remained stable in 2022 and began to rise in 2023. Notably, KOMTAR JBCC is experiencing an increase in gross turnover (GTO) and is expected to return to its pre-COVID level soon.
Soo highlighted the importance of footfall for retail malls’ success, with location remaining a crucial factor. He anticipates a positive outlook for KOMTAR JBCC and JB City Square, both of which are conveniently located near the upcoming Bukit Chagar RTS Station. The RTS, scheduled to be operational in December 2026, is projected to bring 10,000 passengers per hour from Singapore. With this direct link, KOMTAR JBCC is expected to witness a significant increase in footfall.
In addition, Al-Salam Real Estate Investment Trust (Al-Salam REIT), the owner of KOMTAR JBCC, announced plans for a pedestrian overhead bridge connecting the Bukit Chagar RTS station and KOMTAR JBCC. The retail space will also undergo various asset enhancement initiatives, including the creation of an al fresco dining area, reconfiguration of floor space for commercial upscaling, and enhancements to the mall’s ambiance and external façade.
While the exact investment amount was not disclosed, Al-Salam REIT intends to implement a private placement exercise to raise funds for these developments in the medium term.