Mutiara LRT in Penang to revolutionise the property market

Penang’s Mutiara LRT (MLRT) project is poised to revolutionize the property market by significantly impacting land supply and property development. Additionally, the Silicon Island project, involving 2,300 acres of land reclamation at the south of Penang island, will transform the property landscape.

At the Invest ASEAN Conference in June 2024, the Penang government revealed plans to extend the MLRT track alignment to Penang Sentral Butterworth on the mainland, linking it to the national rail network. Construction, estimated to cost MYR10-13 billion, is set to begin in the second half of 2024, with completion by 2029 and operations starting in 2030, according to Maybank analysts.

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Mutiara LRT

To partly finance the project, transit-oriented development (TOD) and transit-oriented area (TOA) concepts will likely be introduced. These are new to Penang and, given the island’s increasing traffic congestion, TOD/TOA properties should see strong demand due to their convenience and accessibility, making this an exciting area to watch.

Potential beneficiaries of the MLRT track alignment, which closely follows the original “Bayan Lepas LRT” route, include property developers such as SPSB (SPICE station stop) and IJM (The Light stop). MRCB (MRC MK, CP: MYR0.655, Not Rated) is also a beneficiary, with the MLRT track extending to Penang mainland and ending at Penang Sentral Butterworth.

Increased FDI/DDIs

E&O (EAST MK, CP: MYR0.985, Not Rated), the largest listed landowner on Penang Island, will benefit from increased FDI/DDIs and improved connectivity if the MLRT alignment extends to Tanjung Bungah. Ideal Capital Bhd (IDEAL MK, CP: MYR3.85, Not Rated), known for affordable high-rise apartments on Penang Island, will also gain from an enhanced transportation system.

A future phase of the MLRT network extending to Simpang Ampat on Penang mainland could benefit Tambun Indah (TILB MK).

Source: Maybank IBG