While Knight Frank Malaysia appreciates the Prihatin Rakyat Economic Stimulus Package (PRIHATIN), it believes that more initiatives should be made to sustain the Malaysian economy and businesses amid the challenges brought by the Covid-19 pandemic.
For Knight Frank, aside from the automatic six-month moratorium granted on all bank loans, it may also be appropriate to waive property taxes, as well as quit rents and assessment for the second half of the year.
“Further stamp duty should be reduced, and tax reliefs given to landlords who grant rent waivers to their tenants in order to help in the recovery process of businesses and the country’s property market,” said Knight Frank Malaysia Managing Director Sarkunan Subramaniam as reported by Bernama.
This is in consideration of the mounting pressure that the property market will be facing due to lower activities in leasing and investment in commercial offices as well as further pressure in the retail segment.
“As both buyers and sellers have become more vigilant amid the outbreak, a wait and see approach is prevalent as people will try to avoid showrooms and sales galleries during this critical period”, he added.
“Disruptions to the property transaction process, such as difficulties in conducting property viewings and conducting of title searches” are likewise expected in view of the current movement control order (MCO).
Aside from this, an increase in non-performing loans which may ultimately lead to more auctions in the market is also foreseen due to the possibility of “more job layoffs due to the challenging business environment”, explained Sarkunan.
Over at the industrial/logistics arena, distribution hubs in Klang Valley are normally used by logistic players for nationwide deliveries.
Considering the ongoing disruptions to the supply chain, a potential decentralisation of logistics players into multiple smaller satellite distribution hubs in order to support local distribution channels, is seen, particularly in Malaysia’s northern and southern regions as well as in Sabah and Sarawak.
Manufacturers worldwide may also start looking for last-mile assembly plants in multiple countries or regions, so that geographical risks that may further disrupt supply chains may be mitigated.