Major development projects in Sabah will help boost the state’s property market, said Knight Frank Malaysia.
Among them is Pavilion Group’s Lok Kawi Resort City project, which is nestled on a 166-ha site in Kampung Meruntum, Lok Kawi, reported the New Straits Times (NST).
A joint-venture between Pavilion’s affiliate Tegas Bangsa Sdn Bhd and Yayasan Sabah Group, the RM7 billion project will feature resort hotels, a theme park, shopping mall, residential properties as well as commercial and office blocks. It will be developed in phases within a period of 15 years.
The Sabah government also entered into a Memoranda of Understanding (MoU) with Linaco Resources Sdn Bhd and SK Nexilis Co in its bid to spur more developments via private financing initiatives.
Linaco Resources, Malaysia’s leading producer of coconut-based products, will reportedly invest RM200 million for the development of a 2,000 hectare coconut-based manufacturing facility in Paitan, Sugut and another RM200 million for a large-scale, high-yield coconut plantations totalling 4,000 hectares.
Once fully operational, the whole project is expected to contribute around RM1.2 billion to Sabah’s economy.
SK Nexilis and SKC Inc, which is a unit of South Korean conglomerate SK Group, will invest RM2.55 billion for the construction of its first overseas copper foil manufacturing facility within Kota Kinabalu Industrial Park (KKIP).
Construction works for the 50,000-tonne capacity manufacturing plant is set to begin in the second half of 2021 with completion slated in 2023.
Aside from creating employment opportunities, these mega-development projects are also expected contribute to the pent-up demand for homes.
These projects will also benefit other segments of the property market such as the commercial, retail as well as tourism and leisure sectors.
In the first quarter of 2021 (Q1 2021), Sabah’s property market posted 1,891 transactions worth RM1.03 billion.
National Property Information Centre’s (NAPIC) Annual Property Market Report showed that market activity increased 3.5% and 24.7% year-on-year in terms of transaction volume and value, respectively.
The existing supply of housing units in Greater Kota Kinabalu, which include the districts of Kota Kinabalu, Tuaran, Penampang, Papar and Putatan, stood at 131,999 as at end of Q1 2021, up 0.4% from Q4 2020’s 131,412 units.
The condominium or apartment segment accounted for 38.3% of the total stock at about 50,601 units.
Sabah also registered 894 transactions worth RM491.83 million under the Home Ownership Campaign (HOC) 2020 – 2021 from June 2020 to March 2021. Of these, 65.9% involved landed properties, while the remaining 34.1% were high-rise units.
“This indicates that there is a preference for landed property amongst buyers, following the steady stream of high-rise properties in recent years,” said Knight Frank as quoted by NST.
Looking ahead, the property consultancy firm expects the landed segment to continue to lead transaction activity within the secondary market.
“Well-located landed homes that afford better privacy and exclusivity are anticipated to garner increased interest, subject to a relatively high entry barrier,” it said.