According to Liu, the best case scenario is the RTS causing a short-term 3% to 4% leakage in retail spend to Johor which is still “manageable”. However, she believes that the RTS is likely to be a net positive for retail in the long-term.
The Johor-Singapore Rail Transit System (RTS) is viewed more as a conduit to “redistributing consumption” and less of a demand disruptor for retail, with the primary purpose of the RTS being to reduce the friction for daily commuting of labour between both countries and not so much to promote weekly shopping trips, says Liu Miaomiao of Maybank Securities.
Liu, speaking at the Singapore Equities Forum, acknowledges that the food and beverage (F&B) sector in the northern part of Singapore may be affected by lower discretionary spending, but non-discretionary spending, such as for groceries, will remain resilient, especially in the CBD area.
