The Rapid Transit System (RTS) will link Woodlands North Station on the Thomson East-Coast Line (TEL) and Bukit Chagar Station in Johor. The first trains are likely to start running by the end of 2026. According to MRT Corp, train frequencies are scheduled to be one every 3.6 minutes during peak hours. The trains will be able to carry 10,000 passengers an hour, and the journey will take around six minutes from station to station.
What will the new trains and the new link to Johor Bahru do to malls along the TEL? Woodlands Station, the stop before getting to Woodlands North, is connected to Causeway Point, the largest Frasers Centrepoint Trust J69U (FCT) asset. Will our town centres turn into ghost towns?
Causeway Point accounts for almost 28% of FCT’s revenue and net property income (NPI). During a 1HFY2024 ended March results briefing in April, Richard Ng, CEO of FCT’s manager, was asked if he was concerned about “economic leakage” or the leakage of potential sales from customers travelling out of Singapore to shop.
Ng pointed to FCT’s committed occupancy of 99.9%, which, he said, resulted from strong demand from retailers for space in FCT’s malls. “We have significantly improved the quality of the portfolio, and this improvement is one of the key drivers of demand,” Ng says. “Most items in our malls are basic necessities and the impact could be less affected by travelling. The nature of our product ensures the community still comes to the mall. Retailers want to be in malls where they can do better and have a presence in dominant malls. We have four out of 10 of the largest malls.”
In addition to Causeway Point, FCT owns Waterway Point, Northpoint City North Wing, Tiong Bahru Plaza, Century Square, Hougang Mall, White Sands, Central Plaza (office), Tampines 1 (undergoing asset enhancement) and 50% of Nex.
As the name suggests, Causeway Point is the nearest mall to the Causeway, the land crossing between Woodlands and Johor Bahru Central. With its supermarket anchor, Causeway Point compares favourably with Johor City Square, owned by Allgreen. It is connected by overhead bridges to the Custom, Immigration, and Quarantine (CIQ) Complex, whose official name is the Sultan Iskandar Complex.
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Singaporeans need to travel further than Johor City Square to visit a supermarket. The nearest to the CIQ is KSL City Mall, a 10-minute drive from the CIQ, or Aeon Mall in Bukit Indah, near the Second Link. These malls are accessible by car or private transport rather than public transport.
Inevitably, Causeway Point retailers have grappled with a departure to JB every weekend anyway, when scores of Singapore residents can be seen heading to Johor by bus and coach if the long queues at Kranji Station are anything to go by.
Analysts have noted both positives and negatives regarding the RTS link. The biggest concern is economic leakage. The chief concerns are overlapping service trades such as hairdressing, spas, facials, manicures, pedicures and food services. Anecdotal evidence suggests that, on a like-for-like basis, a meal at Haidilao in Johor is significantly cheaper than at Haidilao in Singapore.
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A second concern is pharmaceutical products. A common gripe is that the Singdollar (SGD) price of Difflam medicated lozenges is higher than that in ringgit (MYR) in Malaysia. Medication for high blood pressure and diabetes, as well as versions of Semaglutide and Ozempic, are much cheaper in ringgit. On the other hand, Causeway Point may continue to have an edge in basic necessities and essential spending due to convenience.
“Parallels have been drawn between the increasing northbound day trippers from Hong Kong to Shenzhen and those from Singapore to Johor Bahru. With the weak MYR-SGD rate, JB is a popular weekend destination for many Singaporeans (530,000 peak daily travellers over long weekends) due to its ‘value for money’ offerings,” says DBS in a recent report. “The high number of day trippers count will likely depend on the continuation of price differentials in goods and services.”
DBS estimates that the leakage to Singapore could be around $1.5 billion to $2.1 billion annually, premised on retail spending of $100–$141 per person per day (based on Malaysia Tourism Board numbers) and a 40,000 increase in daily travellers once the RTS commences.
DBS remains positive on FCT and DFI Retail Group D01 , which owns Cold Storage and Guardian. “Contrary to expectations, we hold a non-consensus view that the supermarket trade should remain resilient, given the inconvenience of lugging heavy items across the border and low absolute savings,” the report says.
Furthermore, the Singapore government provides subsidies to help lower-income families, and CDC vouchers can only be spent within the country. Additionally, owning a car in Singapore is expensive, so the population is encouraged to use public transport. This approach indirectly benefits places like Causeway Point.
The single RTS link is unlikely to replicate the ease of travel between Hong Kong and Shenzhen. Therefore, DBS does not expect Singapore’s retail sector to be hollowed out, as Hong Kong has been affected.
Even then, Hong Kong landlords are changing their tenant mix and bringing new brands to refresh their malls. For instance, Hongkong Land and its luxury tenants at Landmarks are spending as much as US$1 billion ($1.35 billion) to upgrade Landmarks. China has a luxury tax, and mainlanders still head to Hong Kong for luxury goods.
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CEO Ng was previously with CapitaLand, which constantly refreshes its malls. He would undoubtedly change the tenant mix to remain attractive to Singapore residents and possibly Johoreans. A case in point is IMM, an outlet mall in Jurong East owned by CapitaLand Integrated Commercial Trust C38U . Although far from the Causeway and the upcoming RTS link, IMM has proved to be a popular spot for Malaysians, as cars with Malaysian number plates are often seen in its car park.
An unexpected beneficiary of the RTS link could be Woods Square, an office complex owned by the Far East Organization (FEO) currently facing less-than-ideal occupancy rates. Market observers suggest that the improved travel connections between lower-cost Johor and high-cost Singapore encourage Malaysian workers to live in Johor and commute to Singapore, saving SMEs on foreign worker levies. SMEs could establish their head office in Woods Square and a branch office in Johor, with employees commuting between the two locations instead of residing in Singapore.
Woods Square, the TEL, and other developments are part of the URA’s Woodlands Regional Centre master plan. The vision is for future “synergistic connections” between the Agri-Food Innovation Park, farms, Republic Polytechnic and the Senoko Food Zone, interspersed with parks and cycling paths.
Perhaps the Johor-Singapore SEZ and the latest connectivity initiative will be better planned and implemented than the Growth Triangle of the 1990s and the property boom and bust of Iskandar in the 2010s.
