Malaysia’s real estate industry is expected to witness slower recovery in the second half of 2021, due to issues facing the construction sector such as raw materials supply woes.
Ada Choi, Executive Director at CBRE Research Asia Pacific (APAC), however, expects the country’s rental market to remain stable, registering mild decline in rents of less than 5% this year, reported Bernama.
And while Malaysia had lockdowns much like some countries within the APAC region, she expects the current wave of COVID-19 infections to be controlled relatively quicker.
“I do see there will be improvement but it will probably be first reflected from the demand and recovery in the rental levels,” Choi said in a Maybank Invest ASEAN 2021 virtual session titled “ASEAN Real Estate: Path To Recovery”.
“Regionally, the economy is expected to rebound despite a delayed recovery in Japan and India,” she added.
Choi, who also serves as CBRE Research’s Head of Occupier Research and Head of Data Intelligence and Management, said Singapore’s rental market has started to stabilise, with the republic witnessing more investments.
On the office rental in the future, she said landlords would have to re-think about the user experience offered by their buildings as occupiers are expected to look more on the attributes of the building, rather than on rents and locations only, when looking for space to rent.
“This includes flexible office options, shared meeting spaces, sustainable or latest technology settings. These will be among the prerequisites for the blue-chip tenants,” said Choi.
She added that investments in the region’s real estate sector continued to increase, with a research showing that 96% of respondents plan to increase their investment mainly in Australia, Singapore and Hong Kong.
This implies that there is an opportunity in segments like logistics, value adding or refurbishments for certain segments such as retail, hotels and cold storages.
“We expect the new real estate investment volume to increase by 10% this year, which is still a decent amount of growth, although less than the pre-crisis level,” said Choi.
Recovery in occupiers’ demand is forecasted to be more permanent in 2H 2021, especially when more people return to office.
“Overall, markets will still favour the tenants but not for much longer, as many markets will start recovering in the leasing and rental segments,” explained Choi.
“Occupiers will have to act before the full recovery of the market and for investment activities which are gaining momentum. It could become more competitive.”