HSR termination could slow increase in Jurong property prices, but longer-term prospects intact: experts

THE lack of a major catalyst like the Kuala Lumpur-Singapore High Speed Rail (HSR) project which was terminated on Friday may help slow the increase in property prices in the Jurong area, but experts are choosing to focus on the broader plans to decentralise the central business district (CBD) and longer-term outlook for the area.

Back in May 2015, Jurong Country Club's (JCC) land was gazetted for acquisition for the site to be developed into the Singapore terminus of the HSR link. In January 2017, the government announced that Raffles Country Club will also make way for the HSR project, as well as a depot and stable for the Cross Island MRT line.

Savills Singapore executive director Alan Cheong told The Business Times that prices of commercial and residential properties in the Jurong district will continue to move upwards in the long run, but at a slower pace now.

The termination of the project could ease off pressure on prices in the region, and have trickle-down effects on the rest of Singapore.

"If the government wants to release more land for private residential development, that's going to bring breakeven prices equal to or slightly above current resale prices in the Jurong East or Clementi area," he said.

ERA Realty's head of research and consultancy Nicholas Mak said that while the HSR project was one of the items that could create economic benefits for the area, other factors such as the overall masterplan for the rejuvenation of Jurong as the second CBD and its well-developed infrastructure could deliver benefits as well.

In 2019, the government had also unveiled a seven-hectare land area in the Jurong Lake District that could be developed into an integrated tourism project that include attractions and a hotel.

"Although the latest development on the HSR Terminus is not what some property owners in the Jurong area would desire, the impact of this news would be short-lived and it would not diminish the pull factors and potential of the Jurong-Lakeside area," said Mr Mak.

But the negatives of the termination of the HSR project cannot be ignored.

Alice Tan, head of consultancy at Knight Frank Singapore, said the HSR could have been a chance for both countries to expand their tourism and business opportunities.

"The absence of the HSR would mean strategies to grow the tourism sector would have to be recalibrated for the longer term post-Covid, such as expanding new tourist target markets, exploring modes of connectivity and enhancing alternative modes of partnerships with Malaysia and other countries," said Ms Tan.

"It is envisaged that urban planners would have to review their master plans, rework the details where necessary and to plan for new supporting economic activities in replacement of the HSR."

With the HSR project axed, some might worry if plans to rejuvenate Jurong Lake District could also be shelved, which could trigger a correction in property prices as buyers turn their attention to other residential areas.

Associate director for research at Cushman & Wakefield Wong Xian Yang said he does not see a significant impact on residential prices around the area as there are other "game changing developments" in the pipeline that would underpin residential prices in the Jurong area, including the Tuas mega port and Jurong innovation district.

Mr Wong also said the cancellation of the HSR project will not affect the decentralisation of commercial activities away from the CBD as this has been going on for several years amid a "flight to value trend" in the market.

"The decentralisation story remains very relevant, and given the increased adoption of flexible working arrangements and new ways of working, we could see higher demand for decentralised space as companies review their workspace strategy and potentially look to provide multiple satellite offices near to their employee's homes."

In his view, it is "very unlikely" that the cancellation would have a large impact on the long-term vision of the Jurong Lake District, although there could be some tweaks in terms of planned hospitality and tourism related aspects.

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