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MRT and rental starts at the same time. Good.

One major reason why Hong Kong’s Mass Transit Railway (MTR) is profitable is because of a good business model; renting. They actually own the buildings on top of all the lines. A famous example, IFC Mall. To those who believe ticket price is enough to cover the expenses, it is not true.
Imagine we are the government of the day, who pays for the public transportation? Us, with taxes collected from the people. Is it really enough or do we still have to take loans to do it? Answer is we would need to get loans for it. How do we set the price for public transportation? As low as possible. Would we increase the price even as costs of maintenance and staffs continue to increase year after year? No. There would be huge complaints from the public anytime prices are adjusted upwards, never mind that the adjustments could never cover costs as shown by most of all mass rail transits all around the world, except Hong Kong perhaps. So, their model is really worth emulating.
We did not manage to do it with Monorail or LRT lines but MRT line 1 seems to have something similar. Of course, we are still very far away from how Hong Kong MTR is operating. They even do real estate developments! According to MRT Corp, it expects to earn an annual revenue of RM2.5 million at 19 elevated stations along the MRT Sungai Buloh-Kajang (SBK). Commercial and land management director Datuk Haris Fadzilah Hassan said, “The revenue will be on fixed rentals and not profit-sharing. Rentals vary from RM1,200 to RM3,500 for a 200 sq ft lot, based on stations locations and dependent on market rates in that area.” I hope Haris would also note that all these need to be adjusted on an ongoing basis in order to ensure MRT Corp benefits more and thus more money is made available to improve the services.
Haris also revealed that there would be at most three shoplots at each station – mainly convenience stores and prepacked food outlets as cooking is not allowed within the premises. “Contracts are for two years and renewable based on performance.” International retail brands include Watsons, 7-Eleven and Family Mart, while the local brands are namely myNews.com, Noras Delight and Rotiboy. Yes, one of the stations that I will try would definitely be the Sungai Buloh MRT station. Will update after trying it, that’s for sure. Till then, happy following. MRT is exciting. 
written on 22 Oct 2016
Next suggested article:   Affordable condo, nearby MRT and starts from RM450,800
 

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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