PETALING JAYA: Al-Salam Real Estate Investment Trust
’s (REIT) plan to build a pedestrian overhead bridge connecting Komtar JBCC to the Rapid Transit System (RTS) Link Bukit Chagar station in Johor will drive footfall and higher rental rates for shopping mall.
For this, Al-Salam REIT has signed a memorandum of understanding with Malaysia Rapid Transit System Sdn Bhd for the development of the pedestrian overhead bridge.
The pedestrian overhead bridge will be constructed by Al-Salam REIT and JLand Group Sdn Bhd – property development arm of Johor Corp.
Maybank Investment Bank (Maybank IB) Research said it is encouraged by the news as pedestrian flow will be directed from the planned RTS Link bridge to Komtar JBCC and the surrounding Ibrahim International Business District.
The RTS connects Singapore and Malaysia and has an estimated capacity of 10,000 passengers per hour per direction. Traffic from the RTS is expected to significantly improve footfalls, tenants’ sales and parking occupancy at Komtar JBCC.
“We are positive on this development as we believe that a turnaround strategy at Komtar JBCC remains a key rerating catalyst for Al-Salam.
“Management also plans to reconfigure its tenant mix and bring in premium brands into Komtar JBCC,” Maybank IB said in a report.
The pedestrian overhead bridge is expected to cost about RM10mil to RM15mil and is slated to be ready in 2027.
“As such, Al-Salam will also undertake extensive asset enhancements initiatives (AEI) by upgrading facilities and overall layout at Komtar JBCC.
“Moving forward, it expects to increase Komtar JBCC’s operating hours from 10am to 10pm to 6am to 12am daily,” said the research house.
Maybank IB said the AEI cost is estimated to be about RM25mil and there is a potential for a private placement to fund the construction of the bridge and undertake the AEI.
The research house has maintained a “hold” call on the stock with a 48-sen target price.
