KUALA LUMPUR: RHB Research is upbeat about the real estate sector following the recent meeting between Malaysia and Singapore to accelerate the progress of the Johor-Singapore Special Economic Zone (SEZ).
The bank-backed research firm said companies that can potentially benefit significantly include UEM Sunrise Bhd (UEM), Sunway Construction Group Bhd and AME Elite Consortium Bhd.
Further details regarding tax incentives and cross-border electricity trading are expected to be announced in the coming months, the research firm noted.
To note, Singapore intends to import 30 per cent of its electricity supply from low-carbon sources by 2035, while Malaysia has recently lifted a ban on renewable energy exports.
Apart from the renewable energy sector, other industries that can benefit from the ease of movement of goods between the two countries, highlighted by the Johor chief minister Onn Hafiz Ghazi earlier, include the electronics, pharmaceutical, automotive, and agriculture sectors.
RHB Research said both governments have announced that a memorandum of understanding on the SEZ is expected to be signed on January 11, 2024, as officials on both sides are conducting a feasibility study on the SEZ to determine interest from investors and market demand.
"We believe developers with landbanks near the border (causeway and the Tuas link) should benefit given the focus on ease of transporting goods and people," RHB Research said.
The research firm also said that greater connectivity and industrial activities should lead to higher demand for residential and commercial properties in the future.
RHB Research has maintained an Overweight call on the real estate sector.
"Given both countries' interest in cross-border electricity trading, we expect further news flow on UEM Sunrise's development of its large-scale 1GW hybrid solar photovoltaic power plant to be coming up soon.
"This solar energy plant will be integrated with a renewable energy industrial park," it added.