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Sime Darby to cash in on high-speed raild

KUALA LUMPUR - Sime Darby Bhd, which owns large tracts of land in Negri Sembilan and Johor in Malaysia , is looking to catch a ride on the high speed rail (HSR) network.

It is already in talks with MyHSR Corp – the project delivery company – about the development potential of its land surrounding the proposed stations in Labu, Seremban and Pagoh.
“With the development of infrastructure in the vicinity of our land, Sime Darby will review the current use of the land to ensure that we take advantage of the opportunities available to us so we can create maximum value for all our stakeholders,” a spokesman for the group told The Star. He added that the prospects for the group as a whole was positive, and not just from the perspective of the property division.
“The multiplier effect of greater economic activity will bode well for the group as a whole,” he said.
The HSR line will run for 350km from Kuala Lumpur to Singapore. Construction of the rail line is expected to start in 2018 while revenue services are scheduled to operate in 2026.
Analysts expect the HSR project to spur economic development in its surrounding area.
Potential beneficiaries
A report by JP Morgan Research named property players including Sime Darby, UEM Sunrise Bhd, Sunway Bhd, Eco World Development, Mah Sing Group, SP Setia Bhd, Malaysian Resources Corp Bhd, Eastern & Oriental Bhd, IOI Properties, and Matrix Concepts Holdings Bhd as potential beneficiaries of the HSR project.
Sime Darby, with its large land bank in Labu with total development potential of 10,843acres, is an early winner. 
This plantation land is already part of the massive Malaysia Vision Valley (MVV) project, an integrated economic development area announced by Prime Minister Najib Razak during the tabling of budget 2016 last year.
The company’s land could be the site for one of eight planned HSR stations.
On July 19, Kuala Lumpur and Singapore signed a memorandum of understanding on the HSR which will see eight stations built between both points.
The six intermediate stations will be located in Putrajaya, Seremban (Labu), Ayer Keroh, Muar (Pagoh), Batu Pahat and Iskandar Puteri.
Sime Darby’s land in Pagoh, within the Jorak sub-district of Muar, Johor, comprises a total of 4,082 acres. 
This land is already being developed as a township with a mix of residential and commercial properties, research and development centres, high-tech industries and business parks.
Bandar Universiti Pagoh, Malaysia’s first higher education township is located there.
The Pagoh education hub, which is a component within Bandar Universiti Pagoh, comprises a student village, retail and leisure facilities. It is currently about 95 per cent completed.
The prospects for Sime Darby, with the upcoming HSR stations in the two areas, bear resemblance to the potential that IJM Land Bhd saw with its own land bank in Seremban in 1995, which today has become the Seremban 2 development.
Sitting on 3,800 acres of former rubber estate land, the development was boosted by its excellent connectivity and strategic location, 1 km from the Seremban toll plaza, 4 km southwest of the Seremban town centre and about 60 km from Kuala Lumpur.
Today, it is a 3,800-acre freehold self-contained township and among the most successful developments in the state.
The group has delivered in excess of 12,500 houses and commercial properties valued at 4.7 billion ringgit (Bt40.56 billion).

Published : August 15, 2016