by Jimmy Toh 
The Rapid Transit System (RTS) link between Johor Bahru and Singapore, expected to be completed by 2026, is poised to have a significant impact on industrial property in Johor. Here’s how the RTS will influence the industrial property market in the region:
1. Enhanced Connectivity
Improved Cross-Border Access
- Easier Commuting: The RTS link will drastically reduce travel time between Johor Bahru and Singapore, facilitating smoother and faster cross-border movement of workers, goods, and services. This will make Johor even more attractive to businesses that rely on close ties with Singapore.
- Increased Traffic Flow: The RTS is expected to carry about 10,000 passengers per hour in each direction, improving the flow of human capital and resources between the two regions. This increased connectivity will make Johor a more accessible and desirable location for industrial investments.
2. Boost to Industrial Demand
Rising Interest from Singapore-Based Businesses
- Relocation of Operations: The RTS will likely encourage Singapore-based companies to relocate or expand their manufacturing, logistics, and warehousing operations to Johor, where operational costs are lower. This influx of businesses will drive demand for industrial properties in Johor.
- Increased Foreign Direct Investment (FDI): Improved connectivity is expected to attract more foreign investors, particularly those looking to use Johor as a base for manufacturing and exporting to regional and global markets. This could lead to a surge in demand for industrial land and facilities.
3. Appreciation of Property Values
Increased Land and Property Prices
- Capital Appreciation: The enhanced connectivity brought by the RTS is expected to drive up the value of industrial land and properties in Johor, particularly in areas close to the RTS stations and major transport hubs. Investors can expect significant capital gains as property values appreciate over time.
- Higher Rental Yields: As demand for industrial space increases due to the RTS, rental rates for industrial properties are also expected to rise, leading to higher rental yields for property owners.
4. Development of New Industrial Zones
Emergence of RTS-Centric Developments
- New Industrial Parks: The areas around the RTS stations are likely to see the development of new industrial parks and zones, designed to capitalize on the improved connectivity. These developments could cater to industries such as logistics, manufacturing, and high-tech sectors.
- Revitalization of Existing Areas: Existing industrial zones near the RTS route, such as those in Iskandar Malaysia, may experience revitalization and increased investment due to their improved accessibility.
5. Attraction of Skilled Labor
Access to a Larger Workforce
- Expanded Labor Pool: The RTS will make it easier for skilled workers from both Johor and Singapore to commute, expanding the available labor pool for industries in Johor. This will help businesses attract and retain the talent they need to grow and innovate.
- Workforce Mobility: The improved mobility between Johor and Singapore could encourage more people to live in Johor while working in Singapore, or vice versa, creating a dynamic cross-border labor market that benefits both regions.
6. Long-Term Economic Growth
Catalyst for Broader Economic Development
- Economic Multiplier Effect: The RTS is expected to have a multiplier effect on Johor’s economy, stimulating growth in various sectors beyond just industrial property. The improved connectivity could lead to increased consumer spending, higher demand for residential and commercial properties, and overall economic expansion.
- Enhanced Regional Competitiveness: By improving Johor’s connectivity with Singapore, the RTS will make the region more competitive on a global scale, attracting more international businesses and investors. This will further solidify Johor’s position as a key industrial hub in Southeast Asia.
7. Challenges and Considerations
Potential Overheating of the Market
- Speculative Investments: There is a risk that the anticipation of the RTS could lead to speculative investments in industrial properties, driving prices up too quickly and potentially leading to a market bubble.
- Infrastructure Strain: The influx of new businesses and residents could put a strain on existing infrastructure, requiring additional investments in roads, utilities, and public services to keep pace with the growth.
Conclusion
The RTS link is set to have a transformative impact on the industrial property market in Johor. By enhancing connectivity with Singapore, it will drive demand for industrial space, increase property values, attract skilled labor, and stimulate broader economic growth. For investors, the RTS presents a unique opportunity to capitalize on Johor’s rising status as a prime industrial hub in the region. However, careful planning and consideration of potential risks will be crucial to maximizing the benefits of this new infrastructure.