By Kenny Teng and Norsyafawati Abdul Wahab
KUALA LUMPUR, Aug 20 (Bernama) -- The soon-to-be-developed Tun Razak Exchange (TRX) along the southern end of Jalan Tun Razak is expected to create a positive spillover impact to its surrounding areas of Bukit Bintang, Pudu and Kampung Pandan, say analysts familiar with the urban renewal project.
Formerly known as the Kuala Lumpur International Financial District, TRX will be a critical enabler and vital catalyst for the Government's Vision 2020 and Economic Transformation Progamme initiatives, and is poised to attract more than RM3.5 billion in foreign direct investment.
Its construction was recently launched by Prime Minister Datuk Seri Najib Tun Razak.
A senior analyst with RHB Research Institute, Loong Kok Wen, said the value of properties in the surrounding areas of TRX could gradually appreciate due to new infrastructure and transportation facilities.
She said the appreciation rate could be about five per cent annually and there would be speculative buying of the properties near the areas as well.
"Although more substantial appreciation will depend on the Mass Rapid Transit stations, but I believe the appreciation of value for property located in the vicinity will happen," she told Bernama.
The 28.3 hectare development, off Jalan Tun Razak, is also expected to bring in RM26 billion in gross development revenue.
Loong said the development would not only impact commercial properties but also residential properties.
She said developers would tend to build their projects in the surrounding areas such as Kampung Pandan, Pudu and Bukit Bintang as these areas were set to enjoy good response.
"The new properties surrounding the TRX are likely to enjoy good sales as buyers are confident of future demand for their properties once the financial hub is completed," she said.
AMMB Holdings Bhd Group Managing Director Ashok Ramamurthy said the project would have a spillover effect on real estate investment where many people would hope to have their offices or homes, within the proximity of TRX.
"Real estate developers will take this opportunity to plan their projects in these areas to attract local and foreign buyers," he said.
He felt that Malaysia was "relatively comfortable" with the level of exposure that the real estate sector was enjoying currently.
"I believe that property prices in areas close to TRX will appreciate," he said.
The Federation of Chinese Association of Malaysia's (Hua Zong) Deputy Secretary-General Prof Dr Chin Yew Sin felt the properties in the surrounding areas of TRX would appreciate in a bigger way once people see the physical development of TRX.
He said property development in areas near TRX would definitely enjoy quick demand and rental prices for both residential and commercial properties will increase as well.
"The immediate beneficiaries will be those who currently own properties in the surrounding areas," he said.
Dr Chin said the spillover effects would also benefit hawkers, restaurants and hotels in the area.