WINNERS OR LRT EXTENSION

Transcription

1 KDN : PP 10744/05/2013 (033520) 28 SEPTEMBER 2016 MALAYSIA EQUITY KDN : PP 10744/05/2013 (033520) 29 MARCH 2016 EQUITY WINNERS OR LRT EXTENSION LRT EXTENSION & NEW PROPERTY HOTSPOTS SEPTEMBER 2016 KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES 1

2 TABLE OF CONTENTS Executive summary... 3 A. Background of LRT extension project (LLEP) i. History...4 ii. Objective of the LRT lines extension project...4 iii. Kelana Jaya line extension...5 iv. Ampang line extension...5 v. Klang Valley integrated transit map...6 B. Areas That Will Benefit from Kelana Jaya Line Extension i. Ara Damansara (3 new LRT stations)...7 ii. Subang Jaya (3 new LRT stations)...9 iii. USJ (4 new LRT stations) iv. Putra Heights (3 new LRT stations)...14 C. Areas That Will Benefit From Ampang Line Extension i. Puchong (6 new LRT stations)...17 ii. Bandar Kinrara (2 new LRT stations)...21 iii. Bukit Jalil (2 new LRT stations)...24 D. Conclusions KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES 2 SEPTEMBER 2016

3 EXECUTIVE SUMMARY LRT EXTENSIONS & NEW PROPERTY HOTSPOTS The Light Rapid Transit (LRT) system in the Klang Valley was constructed and introduced as a mode of more efficient way to transport urban commuters. The Ampang Line began its operations in 1996 and followed by Kelana Jaya Line in Figure 1: LRT Extension Project The RapidKL s LRT Lines Extension Project (LLEP) was announced on 29 August 2006 with the aim to further enhance and integrate Klang Valley s public transportation services. The LLEP involves the extensions of Ampang Line and Kelana Source: Prasarana Malaysia Berhad (myrapid website) Jaya Line in which 23 new stations were built to integrate the former and the latter at Putra Heights Station. On 30 June 2016, RapidKL announced the completion of LLEP with all 23 stations now operating. The LLEP objectives include: i) improve travelling convenience, ii) reduce stress and hassle during travelling, iii) encourage development of commercial and residential areas along the alignment, and iv) integrate with other public transportation networks. We have conducted a study on the key areas which will benefit from LLEP completion. Additionally, we also examine the price of properties located nearby the new stations along the LLEP corridor. The purpose of the study is to ascertain whether it is possible to buy an affordable property (priced below RM600,000) which is located within walking distance to the LRT station. For each of the property that we highlight, we have also included the amenities nearby such as supermarket and schools. Our key findings are: i) Puchong is the biggest beneficiary with 6 new LRT stations operating and this is followed by USJ (4 new stations), ii) 8 out of the 10 new LRT stations have nearby property priced below RM600,000 with some property asking price starts from only RM280,000 onwards, and iii) greater connectivity is likely to bode well for the prices of property located around the LRT stations. SEPTEMBER

4 A. BACKGROUND OF LRT LINES EXTENSION PROJECT (LLEP) MALAYSIA EQUITY RESEARCH I. HISTORY The history of Light Rapid Transit (LRT) can be traced back to 184 years ago, in 1832, in the United States. At that time, the tramway (before evolving into LRT) exists in the form of plateways which are used in mines and quarries to ease the passage of horse-drawn wagons. The street railway for the city connects New York and Harlem line. The LRT was introduced to Malaysia with the Ampang Line which began its operations in 1996 and followed by Kelana Jaya Line in In 2011, the ticketing systems for both services were integrated. The RapidKL s LRT Lines Extension Project (LLEP) was announced on 29 August 2006 with the aim to enhance and integrate Klang Valley s public transportation services. Note that Improving Urban Public transport is the 6th National Key Result Areas (NKRA) under the Government Transformation Program (GTP). The LLEP involves the extension of Ampang Line and Kelana Jaya Line in which 23 new stations would integrate the former and the latter at Putra Heights Station with the ultimate aim to provide a seamless journey to all commuters. On 30 June 2016, RapidKL announced the completion of LLEP with all 23 stations now operating. Note that some stations were completed earlier from 31 October 2015 onwards. II. OBJECTIVE OF THE LRT LINES EXTENSION PROJECT In the long run, it is envisioned that LLEP will encourage a greater n u m b e r of public transport commuters. By 2030, the Government has set a vision to raise the modal share to 40% (currently 21%) and this is in line with the National Land Public Transport Master Plan s t a r g e t. Figure 2: Four objectives of the LLEP Source: Prasarana Malaysia Berhad (myrapid website) 4 SEPTEMBER 2016

5 III. KELANA JAYA LINE EXTENSION With a distance of 17.4km, the Kelana Jaya Line Extension includes the construction of 13 new stations. Some of the prominent stations include Ara Damansara, Subang Jaya and USJ and the extension ends at Putra Heights Station. After the recent completion on 30 June 2016, the total length of the Kelana Jaya Line has been increased to 46.4km. Table 1: Completion dates for the new stations along Kelana Jaya Line Station Name Completion Date Lembah Subang Ara Damansara Glenmarie Subang Jaya SS 15 SS 18 USJ 7 Taipan Wawasan USJ 21 Alam Megah Subang Alam Putra Heights Source: Prasarana Malaysia Berhad (myrapid website) IV. AMPANG LINE EXTENSION With a distance of 17.4km, the Ampang Line Extension includes the construction of 12 new stations. Some of the prominent stations include Kinrara and Puchong and the extension ends at Putra Heights Station. After the recent completion on 30 June 2016, the total length of the Ampang Line has been increased to 45.1km. Table 2: Completion dates for the new stations along Ampang Line Station Name Completion Date Awan Besar 31-Oct-2015 Muhibbah 31-Oct-2015 Alam Sutera 31-Oct-2015 Kinrara BK 5 31-Oct-2015 IOI Puchong Jaya 31-Mar-2016 Pusat Bandar Puchong 31-Mar-2016 Taman Perindustrian Puchong 31-Mar-2016 Bandar Puteri 31-Mar-2016 Puchong Perdana Puchong Prima Putra Heights Source: Prasarana Malaysia Berhad (myrapid website) Four stations along the Ampang Line have been completed earlier on 31 October These stations are Awan Besar, Muhibbah, Alam Sutera and Kinrara BK 5. SEPTEMBER

6 Nearly six months after that, RapidKL delivered another four stations along the Ampang Line on 31 March These stations are IOI Puchong Jaya, Pusat Bandar Puchong, Taman Perindustrian Puchong and Bandar Puteri. Lastly, the final three stations were completed on 30 June V. KLANG VALLEY INTEGRATED TRANSIT MAP Figure 3: The integration map of LLEP into Klang Valley Transit Source: Prasarana Malaysia Berhad (myrapid website) 6 SEPTEMBER 2016

7 B. AREAS THAT WILL BENEFIT FROM KELANA MALAYSIA EQUITY RESEARCH JAYA LINE EXTENSIONS I. ARA DAMANSARA (3 NEW LRT STATIONS) Ara Damansara is a relatively new township in Klang Valley. It was launched in 1999 by Sime Darby Property Ara Damansara (previously known as Sime Pilmoor Development Sdn Bhd). The township sits on 762 acres of freehold land and is strategically located along the Sultan Abdul Aziz Shah Airport road. Since its initial development, Ara Damansara has seen rapid expansion due to strong economic growth in Kuala Lumpur and Selangor and coupled with its strategic location. Some of the main landmarks of Ara Damansara include Sultan Abdul Aziz Shah Airport, Saujana Gold and Country Club and Ara Damansara Medical Centre. The established township is located ~33km from Kuala Lumpur City Centre (KLCC). Figure 4: Location of Ara Damansara After the completion of LLEP, Ara Damansara and its immediate vicinity is now served by three new LRT stations. These stations are Lembah Subang, Ara Damansara and Glenmarie. Due to the increased connectivity, we believe that property prices in Ara Damansara should appreciate in the long run. Ara Damansara Station 1 Lembah Subang Lembah Subang Station is located near Life College and Kelana Jaya Medical Centre. It is an elevated station and has been operating since 30 June We expect the completion of the station to: i) improve the enrollment of students for Life College, ii) improve the connectivity of Kelana Jaya Medical Centre, and iii) boost the property price at Lembah Subang. Figure 5: Location of Lembah Subang LRT Station SEPTEMBER

8 Our study shows that Eve Suite is located only 200 metres away from Lembah Subang LRT station. The asking price for Eve Suite starts from RM530,000 for a 680 square feet freehold condominium equipped with 1 bedroom and 1 bathroom. Amenities nearby (less than one kilometer) include Life College, SMK Lembah Subang, Ara Damansara Medical Centre and Kelana Jaya Medical Centre. Figure 6: Eve Suite is located near Lembah Subang LRT Station Ara Damansara Station 2 Ara Damansara Ara Damansara Station is located near Evolve Concept Mall. It is an elevated station and has been operating since 30 June We expect the completion of the station to: i) improve the footfall of Evolve Concept Mall, and ii) boost the property price at Ara Damansara. For Ara Damansara Station, we are unable to find nearby (<1.0km away) residential which is affordable. Picture 7: Location of Ara Damansara LRT Station Ara Damansara Station 3 Glenmarie Glenmarie Station is located near Glomac Boulevard. Operating since 30 June 2016, we expect the completion of the station to improve the connectivity of Glomac Boulevard and boost the property price at Glenmarie. For Glenmarie Station, we are unable to find nearby (<1.0km away) residential which is affordable. 8 SEPTEMBER 2016

9 Figure 8: Location of Glenmarie LRT Station II. SUBANG JAYA (3 NEW LRT STATIONS) Subang Jaya is a mature township in Klang Valley. Originally a rubber estate land, it was developed in the 1970s by Sime UEP Properties Berhad. Location wise, Subang Jaya is strategically surrounded by Shah Alam, Puchong, Putra Heights and Petaling Jaya. Since its initial development, strong economic growth in Kuala Lumpur and Selangor coupled with its strategic location has contributed to rapid expansion in Subang Jaya. Some of the main landmarks of Subang Jaya include Subang Parade, Taylor s University, Inti International College and Subang Jaya Medical Centre (SJMC). The established township is located ~22km from KLCC. Figure 9: Location of Subang Jaya After the completion of LLEP, Subang Jaya is now served by three new LRT stations. These stations are Subang Jaya, SS 15 and SS 18. Due to the increased connectivity, we believe that property prices in Subang Jaya should appreciate in the long run. SEPTEMBER

10 Subang Jaya Station 1 Subang Jaya Subang Jaya Station is located near Subang Parade Shopping Centre. Note that the station is also an interchange station connected to KTM Komuter line. Operating since 30 June 2016, we expect the completion of the station to improve the footfall of Subang Parade Shopping Centre and boost the property price at Subang Jaya. For Subang Jaya Station, we are unable to find nearby (<1.0km away) residential which is priced at affordable level as the surrounding residential properties there are mainly landed and upper middle-end condominiums. Figure 10: Location of Subang Jaya LRT Station Subang Jaya Station 2 SS 15 SS 15 Station is located near SS15 business centre and SS17 neighbourhood. Operating since 30 June 2016, we expect the completion of the station to improve the connectivity of SS15 business centre and boost the property price at SS17 neighbourhood. For SS 15 Station, we are unable to find nearby (<1.0km away) residential which is priced at affordable level as the surrounding residential properties there are mainly landed. Figure 11: Location of SS 15 LRT Station 10 SEPTEMBER 2016

11 Subang Jaya Station 3 SS 18 SS 18 Station is located between SS14 and SS18 neighbourhoods. Operating since 30 June 2016, we expect the completion of the station to improve the connectivity of and property prices at SS14 and SS18 neighbourhoods. For SS 18 Station, we are unable to find nearby (<1.0km away) residential which is priced at affordable level as the surrounding residential properties there are mainly landed. Figure 12: Location of SS 18 LRT Station III. USJ (4 NEW LRT STATIONS) UEP Subang Jaya, or popularly known as USJ, is a mature township in Klang Valley. The development of USJ started after the completion of Subang Jaya and the construction started in 1988 by Sime UEP Properties Berhad (the same developer of Subang Jaya). Since its initial development, strong economy growth in Kuala Lumpur and Selangor coupled with its strategic location has contributed to rapid expansion in USJ. Some of the main landmarks in USJ include USJ Taipan Business Centre, Da Men, The Summit and Monash University Malaysia. USJ is located ~20km from KLCC. Figure 13: Location of USJ SEPTEMBER

12 After the completion of LLEP, USJ is now served by four new LRT stations. These stations are USJ 7, Taipan, Wawasan and USJ 21. Due to the increased connectivity, we believe that property prices in USJ should appreciate in the long run. USJ Station 1 USJ 7 USJ 7 Station is located at Jalan Kewajipan near Summit Hotel and Mydin USJ. Operating since 30 June 2016, we expect the completion of the station to: i) increase the occupancy rate of Summit Hotel, ii) improve the footfall of Mydin USJ, and iii) boost the property prices at surrounding USJ7, USJ6, USJ2 and USJ12. Figure 14: Location of USJ 7 LRT Station Our study shows that Goodyear Court 2 is located only 200 metres away from USJ 7 LRT station. Based on our channel checks, the asking price for Goodyear Court 2 starts from RM250,000 for a 615 square feet freehold flat equipped with 3 bedrooms and 2 bathrooms. The nearest shopping centres are Giant Supermarket and The Summit (both less than one kilometre away). Schools nearby include SMK Seafield and SK Seafield 3. Figure 15: Goodyear Court 2 is located near USJ 7 LRT Station 12 SEPTEMBER 2016

13 USJ Station 2 Taipan Taipan Station is located at Jalan USJ 6/7 near Taipan Business Centre. Operating since 30 June 2016, we expect the completion of the station to improve the connectivity and boost the property prices at Taipan Business Centre as well as surrounding USJ9, USJ8, USJ7 and USJ6. Figure 16: Location of Taipan LRT Station Our study shows that Goodyear Court 5 is located only 220 metres away from Taipan LRT station. Based on our channel Figure 17: Goodyear Court 5 is located near Taipan LRT Station checks, the asking price for Goodyear Court 5 starts from RM287,000 for a 754 square feet freehold apartment equipped with 3 bedrooms and a bathroom. The nearest shopping centre is Subang Parade and Empire Shopping Gallery (both less than one kilometre away). Schools nearby include SMK SS17 and Sekolah Sri Sedaya. USJ Station 3 Wawasan Wawasan Station is located at Persiaran Kewajipan near The 19 USJ City Mall. Operating since 30 June 2016, we expect the completion of the station to improve the footfall of The 19 USJ City Mall and boost the property prices at USJ18 and USJ19. Our study shows that Star Ville Apartment is located in the vicinity of Wawasan Station. SEPTEMBER

14 The asking price starts from RM385,000 for a 850 square feet freehold apartment equipped with 3 bedrooms and 2 bathrooms. Despite its attractive pricing, Star Ville Apartment is not quite within walking distance from Wawasan Station as it is located 1.9km away. Figure 18: Location of Wawasan LRT Station USJ Station 4 USJ 21 USJ 21 Station is located at Persiaran Kewajipan. Operating since 30 June 2016, we expect the completion of the station to be supportive of the property prices at USJ21. For USJ 21 Station, we are unable to find nearby (within walking distance) residential which is priced at affordable level as the surrounding residential properties there are mainly landed. IV. PUTRA HEIGHTS (3 NEW LRT STATIONS) Putra Heights is a mature township in Klang Valley. The township was developed by Sime UEP Properties Berhad in Since its initial development, strong economic growth in Kuala Lumpur and Selangor coupled with its good location has contributed to the fairly rapid expansion of Putra Heights. Some of Figure 19: Location of USJ 21 LRT Station 14 SEPTEMBER 2016

15 the main landmarks in Putra Heights are Bukit Cermin, Putra Point Commercial Centre and Giant Putra Heights. Putra Heights is located ~28km from KLCC. After the completion of LLEP, Putra Heights is now served by three new LRT stations. These stations are Alam Megah, Subang Alam and Putra Heights. Due to the increased connectivity, we believe that property prices in Putra Heights should appreciate in the long run. Figure 20: Location of Putra Heights Putra Heights Station 1 Alam Megah Alam Megah Station is located at Jalan Beranang 4. Operating since 30 June 2016, we expect the completion of the station to be supportive of the property price at Alam Megah. For Alam Megah Station, we are unable to find nearby (within walking distance) residential which is priced at affordable level as the surrounding residential properties there are mainly landed. Putra Heights Station 2 Subang Alam Subang Alam Station is located at Persiaran Putra Perdana. Operating since 30 June 2016, we expect the completion of the station to be supportive of the property price at Subang Alam. For Subang Alam Station, we are unable to find nearby (within walking distance) residential which is priced at affordable level as the surrounding residential properties there are mainly landed. Figure 21: Location of Alam Megah LRT Station SEPTEMBER

16 Putra Heights Station 3 Putra Heights Putra Heights Station is located near Persiaran Putra Indah. Operating since 30 June 2016, we expect the completion of the station to be supportive of the property price at Putra Heights. For Putra Heights Station, we are unable to find nearby (within walking distance) residential which is priced at affordable level as the surrounding residential properties there are mainly landed. Figure 22: Location of Subang Alam LRT Station Figure 23: Location of Putra Heights LRT Station 16 SEPTEMBER 2016

17 C. AREAS THAT WILL BENEFIT FROM AMPANG MALAYSIA EQUITY RESEARCH LINE EXTENSIONS I. PUCHONG (6 NEW LRT STATIONS) Puchong is formerly a tin mining town and it was also filled with rubber estates and oil palm plantations. The development of township in Puchong started from 1980s. Since then, strong economic growth in Kuala Lumpur and Selangor coupled with its strategic location has contributed to the rapid expansion of Puchong. Developed by IOI Properties in 1996, IOI Mall is one of the main landmarks of Puchong. The established township is located ~25km from KLCC. Geographically, Jalan Puchong is the main trunk road while Lebuhraya Damansara-Puchong (LDP) is the main highway in Puchong. The area is also well connected by expressways such as Maju Expressway (MEX), South Klang Valley Expressway (SKVE) and Bukit Jalil Highway. Total population is around 400,000 with the density of 6,487/km2. Figure 24 : Location of Puchong After the completion of LLEP, Puchong is now served by six new LRT stations. These stations are IOI Puchong Jaya, Pusat Bandar Puchong, Taman Perindustrian Puchong, Bandar Puteri, Puchong Perdana and Puchong Prima. Due to the increased connectivity, we believe that property prices in Puchong should appreciate in the long run. Puchong Station 1 - IOI Puchong Jaya IOI Puchong Jaya Station is located near IOI Mall Puchong. It is an elevated station and has been operating since 31 March We expect the completion of the station to: i) boost occupancy rate of IOI Boulevard, ii) increase the footfall of IOI Mall Puchong, and iii) boost the property price at Bandar Puchong Jaya. Figure 25: Location of IOI Puchong Jaya LRT Station SEPTEMBER

18 Our study shows that Sutramas Apartment is located only 830 metres away from IOI Puchong Jaya LRT station. Based on our channel checks, the asking price for Sutramas Apartment starts from RM320,000 for a 845 square feet freehold apartment equipped with 3 bedrooms and 2 bathrooms. The nearest shopping centre is IOI City Mall which is just 730 metres away. Schools nearby (less than one kilometer) include SMK Bandar Puchong Jaya (B), SJK(C) Ladang Harcroft and SK Pusat Bandar Puchong 2. Figure 26: Sutramas Apartment is located near IOI Puchong Jaya LRT Station Figure 27: Sutramas Apartment Source: MIDF Research Puchong Station 2 Pusat Bandar Puchong Pusat Bandar Puchong Station is located near Tesco Extra Puchong and SetiaWalk. It is an elevated station and has been operating since 31 March We expect the completion of the station to: i) improve Tesco Extra Puchong business, ii) increase the footfall of SetiaWalk, and iii) boost the property price at Pusat Bandar Puchong. Our study shows that Kenanga Apartment is located only 540 metres away from Pusat Bandar Puchong LRT station. Figure 28: Location of Pusat Bandar Puchong LRT Station 18 SEPTEMBER 2016

19 Based on our channel checks, the asking price for Kenanga Apartment starts from RM345,000 for a 900 square feet freehold apartment equipped with 3 bedrooms and 2 bathrooms. Figure 29: Kenanga Apartment is located near Pusat Bandar Puchong LRT Station The nearest shopping centres include SetiaWalk and Tesco Extra Puchong. Schools nearby (less than one kilometer) include SMK Bandar Puchong 1, SJK(T) Ladang Kinrara and SJK (T) Castlefield. Puchong Station 3 Taman Perindustrian Puchong Taman Perindustrian Puchong Station Figure 30: Location of Taman Perindustrian is located near Bandar Puteri Puchong. LRT Station It is an elevated station and has been operating since 31 March We expect the completion of the station to: i) improve accessibility to Puteri Square business centre, ii) increase the tenancy of Puchong Financial Corporate Centre (PFCC), and iii) boost the property price at Bandar Puteri Puchong. Puchong For Taman Perindustrian Puchong station, we are unable to find nearby residential with price below RM500,000 as the area is surrounded by landed residential with price above RM800,000. Puchong Station 4 Bandar Puteri Bandar Puteri Station is located at Bandar Puteri Puchong. It is an elevated station and has been operating since 31 March We expect the completion of the station to: i) improve Puteri Mart business, and ii) boost the property price at Bandar Puteri Puchong. For Bandar Puteri station, we are unable to find nearby (which is within walking distance) residential with affordable price as it is surrounded by landed properties. Figure 31: Location of Bandar Puteri LRT Station SEPTEMBER

20 Puchong Station 5 Puchong Perdana Figure 32: Location of Puchong Perdana LRT Station Figure 33: Vista Millennium is located near Puchong Perdana LRT Station Puchong Perdana Station is located near Taman Puchong Indah. It is an elevated station and has been operating since 30 June We expect the completion of the station to: i) increase the footfall of Kompleks Puchong Perdana, and ii) boost the property price at Taman Puchong Indah. Our study shows that Vista Millennium Condominium is located only 810 metres away from Puchong Perdana LRT station. Based on our channel checks, the asking price for Vista Millennium Condominium starts from RM260,000 Figure 34: Vista Millennium for a 850 square feet leasehold condominium equipped with 3 bedrooms and 2 bathrooms. The nearest shopping centre is AEON Bandar Puchong which is just 440 metres away. Schools nearby include SJK(T) Ladang Kinrara, SJK(T) Castlefield and SMK Puchong Permai. Source: MIDF Research Puchong Station 6 Puchong Prima Puchong Prima Station is located near Pasaraya OTK (Puchong) and PETRONAS Puchong Prima. It is an elevated station and has been operating since 30 June We expect the completion of the station to: i) increase the footfall of Pasaraya OTK, and ii) boost the property price at Taman Puchong Prima. Our study shows that Pangsapuri Lotus is located only 320 metres away from Puchong Prima LRT station. Based on our channel checks, the asking price for Pangsapuri Lotus starts from RM255,000 for a SEPTEMBER 2016

21 square feet freehold apartment equipped with 3 bedrooms and 2 bathrooms. The nearest shopping centre is Aeon Big Puchong which is less than 2 kilometres away. Schools nearby include SK Puchong Indah, SK Puchong Perdana and SMK Puchong Permai. Figure 35: Location of Puchong Prima LRT Station Figure 36: Pangsapuri Lotus is located near Puchong Prima LRT Station Figure 37: Pangsapuri Lotus Source: MIDF Research II. BANDAR KINRARA (2 NEW LRT STATIONS) Bandar Kinrara is formerly a rubber estate known as Kinrara Estate. The development of Bandar Kinrara townships by Island & Peninsular Group Sdn Bhd (I&P Group) started in 1991 with a project called Bandar Kinrara 1. Since then, strong economic growth in Kuala Lumpur and Selangor has contributed to rapid expansion of Bandar Kinrara. Location wise, Bandar Kinrara is strategically located between Puchong, Selangor and Bukit Jalil, Kuala Lumpur. Developed in 2008, Giant Shopping Complex is one of the main landmarks in Bandar Kinrara. SEPTEMBER

22 The established township is located ~23km from KLCC and 9km from Bandar Sunway. Geographically, Lebuhraya Bukit Jalil is the main road traversing Bandar Kinrara. The township is also well connected via expressways such as Lebuhraya Damansara-Puchong (LDP), Kuala Lumpur Middle Ring Road 2 (MRR2), New Klang Valley Expressway (NKVE) and New Pantai Expressway (NPE). After the completion of LLEP, Bandar Kinrara is now served by two new LRT stations. These stations are Kinrara BK 5 and Alam Sutera. Due to the increased connectivity, we believe that property prices in Bandar Kinrara should appreciate in the long run Figure 38: Location of Bandar Kinrara Bandar Kinrara Station 1 Kinrara BK 5 Kinrara BK 5 Station is located near Giant Bandar Kinrara. It is an elevated station and has been operating since 31 October We expect the completion of the station to: i) increase the footfall of Giant Bandar Kinrara, and ii) boost the property price at Bandar Kinrara. Our study shows that Pangsapuri Seri Kasturi is located less than one kilometre away from Kinrara BK 5 LRT station. Based on our channel checks, the asking price for Pangsapuri Seri Kasturi starts from RM350,000 for a 868 square feet freehold apartment equipped with 3 bedrooms and 2 bathrooms. Figure 39: Location of Kinrara BK 5 LRT Station Figure 40: Pangsapuri Seri Kasturi is located near Kinrara BK 5 LRT Station 22 SEPTEMBER 2016

23 The nearest shopping centre is Giant Bandar Kinrara which is less than one kilometre away. Schools nearby include SK Seksyen 2 Bandar Kinrara, SK Bukit Kuchai and SMK Seksyen 1 Bandar Kinrara. Figure 41: Pangsapuri Seri Kasturi Bandar Kinrara Station 2 Alam Sutera Alam Sutera Station is located near Mercedez-Benz Autohaus Kinrara and Bank Islam Bandar Kinrara. It is an elevated station and has been Source: MIDF Research operating since 31 October We expect the completion of the station to boost the property price at Bandar Kinrara. Our study check shows that The Zest is located less than one kilometre away from Alam Sutera LRT station. Based on our channel checks, the asking price for The Zest starts from RM495,000 for a 1205 square feet freehold service apartment equipped with 3 bedrooms and 2 bathrooms. Figure 42: Location of Alam Sutera LRT Station Figure 43: The Zest is located near Alam Sutera LRT Station The nearest shopping centre is Giant Bandar Kinrara which is less than one kilometre away. Schools nearby include SMK Seksyen 4 Bandar Kinrara and SK Seksyen 1 Bandar Kinrara. Figure 44: The Zest Service Apartment Source: MIDF Research SEPTEMBER

24 III. BUKIT JALIL (2 NEW LRT STATIONS) Bukit Jalil is formerly known as Bukit Jalil Estate. The development of Bukit Jalil townships began in 1992 when the construction of National Sports Complex started in preparation for 1998 Commonwealth Games. Since then, strong economic growth in Kuala Lumpur and Selangor has contributed to rapid expansion in Bukit Jalil. Location wise, Bukit Jalil is strategically located between Bandar Kinrara, Selangor and Sri Petaling, Kuala Lumpur. The National Sports Complex is one of the main landmarks of Bukit Jalil. Figure 45: Location of Bukit Jalil The established township is located ~16km from KLCC and 12km from Bandar Sunway. Geographically, Jalan Merah Cagar is the main road in Bukit Jalil. The township is well connected via expressways such as Lebuhraya Damansara-Puchong (LDP), Kuala Lumpur Middle Ring Road 2 (MRR2), Maju Expressway (MEX) and Shah Alam Expressway (KESAS). After the completion of LLEP, Bukit Jalil is now served by two new LRT stations. These stations are Muhibbah and Awan Besar. Due to the increased connectivity, we believe that property price in Bukit Jalil should appreciate in the long run. Bukit Jalil Station 1 Muhibbah Muhibbah Station is located near Hawanas Mini Market and Projek Perumahan Rakyat (PPR) Kampung Muhibbah. It is an elevated station and has been operating since 31 October We expect the completion of the station to improve the mobility of the people who stays at PPR Kampung Muhibbah. As PPR Kampung Muhibbah is a government effort to provide housing facility for the Picture 46: Location of Muhibbah LRT Station 24 SEPTEMBER 2016

25 people, we believe that most investors are not qualified to buy the units there. Note that purchase of house under PPR has to be done via Ministry of Urban Wellbeing, Housing and Local Government. One of the criteria is household income of less than RM2,500 per month. Figure 47: Z Residence is located near Muhibbah LRT Station Our study shows that Z Residence, a private development (no income restriction), is located less than one kilometer away from Muhibbah LRT station. Based on our channel checks, the asking price for Z Residence starts from RM620,000 for a 1,036 square feet freehold condominium equipped with 2 bedrooms and 2 bathrooms. Schools nearby include SMK Taman Yarl and SK Seri Suria (both located less than one kilometer away). Figure 48: Z Residence Source: MIDF Research Bukit Jalil Station 2 Awan Besar Awan Besar LRT Station is located at Jalan 4/155, Bukit Jalil and is close to Bukit OUG Condominium. It is an elevated station and has been operating since 31 October We expect the completion of the station to boost the property price at Bukit OUG Condominium. SEPTEMBER

26 Our study shows that Bukit OUG Condominium is located less than one kilometer away from Awan Besar LRT station. Based on our channel checks, the asking price for Bukit OUG Condominium starts from RM280,000 for a 775 square feet freehold condominium equipped with 2 bedrooms and 1 bathroom. Schools nearby include SMK Petaling and SK Seri Mega and SJK (C) Yoke Nam. Figure 49: Location of Awan Besar LRT Station Figure 50: Bukit OUG Condominium is located near Awan Besar LRT Station Figure 51: Bukit OUG Condominium 26 SEPTEMBER 2016

27 F. CONCLUSIONS MALAYSIA EQUITY RESEARCH The successful completion of LLEP shows that the Government is serious in its commitment to improve the coverage of transport system within the Greater Kuala Lumpur. We believe the LLEP will generate positive impact on the local economy as businesses located near the new LRT stations should receive higher footfall which will then bring in higher revenue. Additionally, it may also help to ease traffic situation along the new rail corridors as more people opt for LRT to travel to work. We opine that first home buyers should consider sub-sale property in order to get good deals at price within the affordable range. Based on our research, there are still properties with price below RM300,000 within walking distance to LRT stations. Therefore, young executives who work in Kuala Lumpur city centre may consider buying the properties that we have highlighted and travel by using public transport to their workplace. This may offer a solution to the issue of affordability which is prevalent especially the Klang Valley. We believe that the long term prospect for property prices in Malaysia remains favorable. However, investors who are interested to invest directly in Malaysian property market should stay for the longterm, i.e. more than 5 years. As it is, any property which is sold in less than 5 years after the purchase date will attract Real Property Gains Tax (RPGT). Moreover, investors should do some homework and identify good locations which have better prospects for improved amenities and higher population in the future. Generally, buying a property near the LRT station should be a good strategy in the long run. Apart from the connectivity reason, other factors affecting property price include potential for population increase, employment opportunity and income demographics of the residents in the area. For the properties companies listed in Bursa Malaysia, we maintain our NEUTRAL outlook on the property sector. The latest Bank Negara statistics show that Approved Loan for Purchase of Property in July 2016 decreased 13%yoy to RM10.5b, a continuous decline for eighteen straight months since Feb On a monthly basis, approved loan in July was 6% lower. The decline in approved loan was mainly due to lower applied loan amount. On a cumulative basis, total approved loan for 7M2016 is at RM67.5b (-22%yoy). As a result, we maintain our NEUTRAL view on the sector as we continue to see limited growth prospect for property developers sales in We may upgrade the sector to POSITIVE if these catalysts occur and subsequently cause the Approved Loan for Purchase of Property figure to register a sustainable positive growth: i) interest rate is lowered down further by Bank Negara Malaysia, ii) more support to first home ownership by the Government or iii) improvement in Malaysia economy growth which will then lead to higher income per capita. SEPTEMBER

28 MIDF RESEARCH is part of MIDF Amanah Investment Bank Berhad ( X) (Bank Pelaburan) (A Participating Organisation of Bursa Malaysia Securities Berhad) 28 SEPTEMBER 2016 Business Address: 11 & 12 th Floor, Menara MIDF, 82, Jalan Raja Chulan, Kuala Lumpur. Tel: Fax: