Frustrated by the causeway jam?
Not for much longer, after the completion of the highly anticipated Johor Bahru (JB)-Singapore Rapid Transit System (RTS) Link, slated for operations in 2027.
Armed with the structurally rising Singapore dollar, Singaporean consumers are fully equipped to maximise their retail therapy experiences in JB.
However, the mood isn’t all-upbeat among investors with a significant stake in local real estate investment trusts (REITs), as they grapple with the possible spending outflow to their northern neighbour.
Despite the perceived headwind, some REITs could still benefit.
Epicentre of Growth – The Central Region
Singaporean spending in Malaysia is expected to increase by S$1.05 billion, while Johoreans’ additional spending in Singapore amounts to just S$756 million.
The implications?
A net S$290 million of outbound spending in favour of JB businesses.
While Singaporean consumers enjoy lower spending at JB, Singaporean businesses could be impacted, with the suburban grocery and drugstore categories taking the hardest hit.
However, instead of cost-conscious consumers, Singapore is expected to attract consumers with deep pockets (not value hunters), benefiting from their discretionary, “experiential” spending.
To this end, the central region, known for hosting major concerts, luxurious hotels, and tourist attractions, stands to be the epicentre of growth – a potential tailwind for central landlords.
CapitaLand Integrated Commercial Trust (SGX: C38U), or CICT – The Diversified Beneficiary
CICT could become one of the greatest beneficiaries, with its robust portfolio of premier retail assets such as Funan, Plaza Singapura, Raffles City, and Bugis Junction, at the heart of the city centre.
Notably, it’s not heavily dependent on them, unlike other pure-play retail REITs.
In the first half of 2026 (1H2026), CICT’s revenue grew 7.5% to S$846.8 million YoY, thanks to the resilience of its diversified portfolio, which spans across retail, office, and integrated developments, guarding against cyclical slumps in specific segments.
This resilience is also instrumental in driving its distribution up 7.1% to S$0.0602 per unit, even as it enlarged its unit base.
CICT’s diversified portfolio, combined with its prime tourist-friendly retail space, makes it a formidable beneficiary while mitigating the downsides of potentially cyclical consumer traffic.
Starhill Global REIT (SGX: P40U) – Having The Best of Both Worlds
Starhill is another contender primed to snap up the increased discretionary spending as the central area becomes a destination for premium consumption.
And discretionary spending in this region is anchored by the shopping belt of Orchard Road.
Crucially, this is where the REIT’s anchor malls of Wisma Atria and Ngee Ann City are situated and enjoy full occupancy.
In the second half of the fiscal year ended 30 June 2026 (2HFY2025/26), its gross revenue and net property income (NPI) improved marginally by 0.4% and 1.0% to S$96.2 million and S$75.3 million YoY, respectively, as higher contributions from Ngee Ann City and other properties more than offset the reduced income from its divested Office strata units of Wisma Atria.
While deep-pocketed consumers from JB are likely to patronise this region to soak up the luxurious spending experience, affluent residents of these central areas are less likely to cross the border for basic daily shopping.
What does this mean?
The REIT enjoys the best of both worlds – benefiting from tourist inflows while being shielded from urban outflow.
Suntec REIT (SGX: T82U) – A Massive Meetings, Incentives, Conferences, and Exhibitions (MICE) Hub
Anchored by its flagship retail asset of Suntec City Mall, Suntec is another REIT poised to benefit from the central area as a magnet for increased international travel.
Crucially, Suntec City is more than a mall – it’s also a massive hub for MICE events.
In the first half of 2026 (1H2026), its gross revenue increased by 1.9% to S$238.9 million, while NPI decreased by 0.3% to S$159 million year on year (YoY).
The reason?
The stronger 1H2026 operating performance across both its Singapore office and retail properties was not enough to fully offset the absence of one-off compensation recorded in the previous year.
Still, stronger Singapore operating performance, lower financing costs, and the absence of an Australian withholding tax provision recorded in the prior year allowed the REIT to increase its distribution by 24.8% to S$0.0394 per unit.
Suntec’s additional event-driven footfall gives it monetisation opportunities beyond pure retail traffic.
Get Smart: The Central Region Taking Growth Centre Stage
Despite the grim outlook for consumer spending outflow in favour of JB (not Singapore), the underlying reality is nuanced.
While suburban properties could be impacted by a net consumption outflow, the central region is poised to benefit from a surge in cross-border traffic.
However, increased competition from JB might trigger a constructive shift in the tenant mix of suburban malls that fortifies their resilience in the long run – something for investors to monitor.
Keep an eye on potential investment opportunities among REITs with geographic exposure in the central region.
The JB–Singapore RTS doesn’t have to be just a transport link – it could be a powerful growth engine.
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Disclosure: Larry L. owns units of CICT.
