Sabah and Sarawak’s real estate sector is expected to post a revival once the COVID-19 pandemic wanes and tourists have returned, according to Datuk Stewart LaBrooy, Board Member of Asia Pacific Real Estate Association (APREA),
This comes as the property markets in West and East Malaysia could not be more different, he said.
“West Malaysia has a vibrant economy, the best infrastructure in Asean except for Singapore and large and diverse property market, a strong pool of knowledge workers and an established banking system,” LaBrooy told The Borneo Post in an interview.
“It has attracted over the years many multinational industrial players who have set up their businesses in West Malaysia. It also boasts a strong housing market with large scale developers investing in rolling out huge township developments.”
Meanwhile, Sabah and Sarawak have a strong agri-business economy, “but have small populations in relations to their land masses”, he added.
Sabah has a land mass of 74,000 sq km and 3.543 million population, while Sarawak spans 124,450 sq km with a population of 2.81 million. This translates into a ‘largely domestic’ demand for property, according to LaBrooy.
“And over 2020 it was badly affected by the movement control order, with drops of over 20% and a fall in valuation as well,” he said. “Occupancy of commercial building fell nearly 50% putting a huge burden on landlords. West Malaysia was nowhere this badly affected.”
LaBrooy noted that the Achilles heel for both economies is that tourism played a major role in its success and tourist arrivals significantly dropped, affecting all related real estate, such as hotels, malls and tour companies, reported The Borneo Post.
“Although both parts were affected West Malaysia was able to ride out the storm a much better,” he said.
With this, the Sabah and Sarawak state governments decided to inject a huge investment in infrastructure with the Pan Borneo Highway and the upgrade of bridges and rural roads.
“Sarawak is also blessed with green hydro power in the dorm of the Bakun Dam and there are other dams being constructed to boost power in the states. This will in turn attract companies that require energy for their operations and today boasts one on the largest aluminium smelters in the region,” said LaBrooy.
He believes that they could also attract data centres if adequate “communication cables are laid from the two states to link up with the other hubs in Hong Kong and Singapore”.
He added that Sabah and Sarawak are also blessed with timber, oil, palm oil and cocoa, which are much sought-after commodities for export.
“As the pandemic wanes and tourists return there will be a revival in real estate in both states,” said LaBrooy.
“With the boost in infrastructure spending and the move by Indonesia to move their capital next door to Sarawak there will be a huge rise in building activity which Sarawak which would have by then developed a world class infrastructure can capitalise on.”