Overall property market remain subdued as potential investors continues to adopt the ‘wait-and-see’ approach
17 August 2017, Malaysia – Knight Frank Malaysia, the global property consultancy, launches their latest research report, Real Estate Highlights for 1st Half of 2017. The report looks into the market performance across the various property mix – Residential, Office and Retail; and highlights the trends and outlook in various regions of Malaysia, namely Kuala Lumpur, Klang Valley, Penang, Johor Bahru and Kota Kinabalu.
Sarkunan Subramaniam, Managing Director of Knight Frank says, “Despite the overall subdued market in 1H2017, the recent rebound in the country’s economy coupled with the strengthening of the local currency and stable employment market amongst other positive developments, offers a ray of hope for recovery in the high-end condominium market. While in the office sector, the quality of office stock continues to be upgraded to cater to the requirements of large corporates and multinational companies.
With the increase of supply and competition, malls are facing challenges in sustainability in the retail market. Operators are refurbishing, rebranding and repositioning their malls to improve footfall. Fashion and F&B related trades are no longer the key to increase footfall, shopping centres are starting to promote experiences instead of products, such as transforming its car park into an indoor kart zone.
Moving forward, Malaysia will remain as an attractive investment destination with its stable property market and relatively low entry prices that continue to offer reasonable returns.”
Highlights for 1H2017 Kuala Lumpur High End Condominium Market
The market remained subdued with lesser market activity and developers are scaling back on new property launches.
Secondary pricing in selected locations remained flat while rentals continued to be under pressure.
With potential purchasers and investors waiting on the sidelines, developers continue to tweak their marketing strategies to sustain earnings through “stock clearing” of completed and ongoing projects.
Kuala Lumpur & Beyond Kuala Lumpur (Selangor) Office Markets
The quality of office stock continues to be upgraded with the completion of more Grade A and dual-compliant (MSC+GBI) buildings that caters to the requirements of large corporates and multinational companies.
Refurbishment and redevelopment opportunities abound for well-located older and lower grade office stock.
The scheduled full completion of the Sungai Buloh-Kajang MRT Line (MRT Line 1) is expected to boost demand for offices in established and upcoming decentralised office locations.
Klang Valley Retail Market
Retail sales for 1Q2017 dipped 1.2% when compared to the corresponding period in 2016 as consumers continue to remain cautious in their spending amid rising cost of living.
Cumulative retail stock increased 1.1 million sq ft with the completion of MyTown Shopping Centre in 1Q2017.
In respond to challenges in the retail market, operators are taking proactive measures to refurbish, reconfigure and reposition their shopping centres to improve footfalls and maintain competitiveness.
Penang Property Market
The market is lacklustre with the residential sector still in consolidation mode.
In the office sector, some buildings have achieved slight increases in occupancy levels and rentals.
The increasing supply of shopping mall space and opening of new outlets is becoming a huge challenge to mall owners and landlords who are trying to keep both occupancy and rental levels up.
Johor Bahru Property Market
The Johor property market has been lacklustre since the beginning of the year especially with China’s capital controls on outflow of funds to overseas investment.
In the office sector, new office buildings are being constructed in the city fringes and Iskandar Puteri, especially Medini being the hotspot.
Despite the soft market, total transacted value of industrial properties increased 75.5% yearon-year (y-o-y) as of 1Q2017.
As of 1Q2017, total cumulative committed investment in Iskandar Malaysia stands at RM227.67 billion.
News Release
Kota Kinabalu Property Market
The slowdown in market activity in Kota Kinabalu looks set to continue in 2017 as it will take some time for the market to fully absorb the incoming units of high rise residential projects.
High rise residential units make up 34% of total residential stock and expected to further increase with major influx of units in the pipeline.
The office sub-sector continued to hold steady with both occupancies and rentals maintaining at relatively healthy level.
In view of the high impending supply, the retail sector is facing a more challenging phase to sustain. Overall occupancy rates are anticipated to be affected with new malls entering the market and slower take-up rate for new retail space.
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