REAL ESTATE HIGHLIGHTS - RESEARCH - 1ST HALF 2017 - Knight Frank
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
RESEARCH REAL ESTATE HIGHLIGHTS 1ST HALF 2017 kuala lumpur penang johor bahru KOTA KINABALU
HIGHLIGHTS KUALA LUMPUR HIGH END
Subdued high-end condominium
CONDOMINIUM MARKET
market with developers scaling
back on new property launches
ECONOMIC INDICATORS 44.3%). Meanwhile, 1Q2017 also saw a
marginal increase in the total outstanding /
amid continued weak demand. Malaysia’s economy rebounded in non-performing loans in the housing sector
1Q2017 with Gross Domestic Product to RM5.54 billion (4Q2016: RM5.41 billion).
(GDP) expanding at 5.6% (4Q2016:
With potential purchasers and
4.5%), driven mainly by higher private
investors waiting on the side-
expenditure. For 2017, the country’s GDP
lines, developers continue to growth forecast range between 4.3% and
tweak their marketing strategies 4.8%, supported by gradual improvement
to sustain earnings through in the global economy and domestic
“stock clearing” of completed demand.
and on-going projects.
Headline inflation for 1Q2017 was higher
at 4.3% (4Q2016: 1.7%), driven mainly
Limited completions of high- by high transportation cost. The annual
end condominiums / residences inflation for 2017 is expected to be in the
during the review period. region of 3.0% to 4.0% (2016: 2.1%).
The labour market condition for 1Q2017
Secondary pricing in selected remained stable, with the unemployment
locations remained flat while rate of 3.5% (4Q2016: 3.5%).
rentals continued to be under
To remain accommodative to economic
pressure.
activity and to support domestic demand,
Bank Negara Malaysia (BNM) continued
China’s capital control impact to maintain the Overnight Policy Rate
projects targeting buyers from (OPR) at 3.0%.
mainland China.
As for residential property purchase,
the ratio of approvals to applications for
The Sentral Residences
1Q2017 was lower at 40.4% (4Q2016:
FIGURE 1
Projection of Cumulative Supply for High End Condominiums /
Residences 2013 - 2H2017(f)
Note:
(1) (F) = Forecast
(2) The locality of Bangsar includes Bangsar, Bangsar South, KL Sentral, KL Eco City and Pantai Sentral Park
Source: Knight Frank Research
2
real estate highlights malaysia
projects which made their wave since
TABLE 1 2013. They are The Ritz-Carlton
Completion of High End Condominiums / Residences in 1H2017 Residences (288 units); Four Seasons
Place (242 units); Tribeca Bukit Bintang
(318 units); The Ruma Residences (199
units) and The Establishment (521 units).
Source: Knight Frank Research
SUPPLY & DEMAND lower than the previous quarter (4Q2016:
1,420 units valued at RM1.04 billion).
During the period under review, the
high-end condominium market in Kuala The cumulative supply of high-end
Lumpur remained subdued with lesser condominiums / residences stood at
market activity as potential buyers and 47,380 units in 1H2017 following the
investors continued to adopt the ‘wait- completion of three projects contributing
and-see’ approach. a total of 1,333 units. They are The
Sentral Residences (752 units); Arcoris
Amid weak market sentiment, Wilayah
Mont’ Kiara (331 units) and 28 Dutamas
Persekutuan Kuala Lumpur (WPKL)
(250 units).
recorded lower volume and value
of transactions in the condominium By the second half of 2017, another
/ apartment segment with 1,247 eight projects totalling 2,979 units are
transacted units valued at RM975.88 scheduled for completion, five of which
million in 1Q2017, 12.2% and 5.9% comprise of hotel branded / managed The Ritz-Carlton Residences
These developments, leveraging on
TABLE 2
international and regional class hotel
Notable Launches in 1H2017
brands, continue to raise the standard
of luxury living in Kuala Lumpur. They
will join the 2016 maiden completions
SR = Serviced Residence SA = Serviced Apartment
Four Seasons Place
Source: Knight Frank Research
3
of branded residences in Kuala Lumpur, sizing, floor level and other factors. locations such as those along the rail
namely, the 441 private residences at transportation routes for transit oriented
In the secondary market, transacted
Pavilion Banyan Tree Signatures and developments (TOD) and affordable cum
prices of smaller condominium /
the 160-unit The Residences at The St. mass housing projects.
apartment units sized below 800 sq ft in
Regis Kuala Lumpur.
selected schemes such as Marc Serviced The popularity of dual-key units, offering
There were noticeably less launches of Residence and ViPod Residences in additional rental income, and smaller
high-end condominiums / residences KL City, continued to remain resilient at sized units continues as affordability
during the review period. RM1,600 per sq ft to RM1,800 per sq ft. remains a key issue in the domestic
housing market.
Notable launches in 1H2017 include the Despite the soft market, asking prices
Serviced Residences at KL Metropolis’s continue to remain relatively stable Moving forward, the recent rebound in
MET 1; Isola @ KLCC; and Dorsett although vendors are more flexible in the country’s economy coupled with
Residences Sri Hartamas (Phase 1) negotiations. strengthening of the local currency and
which was previously marketed as stable employment market amongst other
Hermitage. Outlook positive developments, offer ray of hope
for recovery in the high-end condominium
Prices and Rentals China’s recent regulatory changes over
market. Malaysia remains as an attractive
international monetary transfers continue
During the review period, there was no investment destination in the region with
to impact projects targeting buyers
sign of recovery in the rental market. from mainland China. This is expected its stable property market and relative
to further dampen the already weak lower entry prices that continue to offer
Asking rentals in selected older schemes
high-end condominium market which is reasonable returns.
in the localities of KL City, Damansara
Heights, Bangsar and Mont’ Kiara remain undergoing self-correction amid widening
under pressure. gap between supply and demand.
Amid the challenging property market
Newly launched projects are priced from
environment, developers continue to
RM1,000 per sq ft onwards. In KL Fringe,
tweak their marketing strategies to
the serviced residences at MET 1 KL
sustain earnings through ‘stock clearing’
Metropolis are priced from RM1,000 per
of completed and on-going projects.
sq ft to RM1,100 per sq ft on average
while in KL City, the pricing for Isola @ Developers are also seizing opportunities
KLCC range from RM1,500 per sq ft to in this soft market to increase their
RM1,600 per sq ft depending on unit land banks in strategic Klang Valley
TABLE 3
Average Asking Prices and Rentals of Existing High End Condominiums
*Excludes Binjai on the Park but includes Pavilion Residences
**Excludes Seri Hening
***Includes Twins @ Damansara Heights
****Excludes Verve Suites which comprise mainly fully furnished small units
Source: Knight Frank Research
4
real estate highlights malaysia
HIGHLIGHTS KUALA lUMPUR & Beyond
Kuala lumpur (Selangor)
OFFICE Markets
The quality of office stock for
both Kuala Lumpur and Beyond
Kuala Lumpur (Selangor)
continues to be upgraded with Market INDICATIONS (Tower 1).
the completion of more Grade A
The Kuala Lumpur and Beyond Kuala Menara Public Bank 2, a 40-storey newly
and dual-compliant (MSC+GBI)
Lumpur (Selangor) office markets continue completed Grade A office tower, at Jalan
buildings that caters to the
to remain lacklustre with demand lagging Raja Chulan in the Golden Triangle of
requirements of large corporates
behind supply. Kuala Lumpur, offers a net lettable area
and multinational companies.
(NLA) of 420,000 sq ft. The green building
Supply with both LEED Platinum and GBI Gold
Refurbishment and certifications features dual entrances,
As of 1H2017, the cumulative supply
redevelopment opportunities a banking hall and a quadruple-volume
of purpose-built office space in Kuala
abound for well-located older and grand lobby. It has typical floor plate of
Lumpur and Beyond Kuala Lumpur
lower grade office stock. about 12,500 sq ft.
(Selangor) stood at circa 99.0 million sq ft.
Located in the established township of
There were eight completions during the
The scheduled full completion of Taman Tun Dr Ismail, Menara Ken @
review period, adding some 2.63 million
the Sungai Buloh-Kajang MRT TTDI is a brand new 13-storey Grade A
sq ft of space to the existing stock.
Line (MRT Line 1), linking to KL office tower with a NLA of 300,000 sq
Sentral, Malaysia’s largest transit In KL City, the cumulative supply ft. The MSC compliant tower, certified
hub by July, is expected to boost increased to 51.4 million sq ft following with LEED Platinum, BCA Green Mark
demand for offices in established completion of Menara Public Bank 2 while Platinum and GreenRE Platinum, offers
and upcoming decentralised in KL Fringe, the completion of Menara typical floor plate of 25,000 sq ft. Three
office locations. Ken @ TTDI, The Pillars @ KL Eco City floors of the building are designated for
and Menara SUEZCAP 1, brought the food & beverages (F&B) outlets, ballroom,
cumulative supply to 27.3 million sq ft. function rooms, a performing arts theatre
In Beyond KL (Selangor), the cumulative and arts gallery while the recreational
supply increased to 20.2 million sq ft facilities at the rooftop include a
following completion of SunGeo Tower, gymnasium, swimming pool and sky bar.
Block G and Block H of Empire City SunGeo Tower forms part of Sunway
Damansara and Mercu Mustapha Kamal Geo integrated development that also
comprises retail shops, office suites
and residential components. The
17-storey Grade A tower comprises
Menara Public Bank 2 Block H of Empire City Damansara
5
14 levels of office space, three levels estimated GDV of RM420 million, the and weak demand from its traditional
of retail space and sky gym at rooftop. proposed development will comprise a occupiers in the Oil & Gas (O&G) and
SunGeo Tower, which comes with MSC car showroom centre and four blocks banking sectors, especially in KL City,
Malaysia Cybercentre status, is currently of signature office towers. Located on a continued to impact the office market.
in the process of applying for GreenRE 2.87-acre commercial site, the project As for the decentralised office locations
Certification. The building with NLA of has an estimated gross floor area (GFA) in KL Fringe and Beyond KL (Selangor),
161,000 sq ft offers typical floor plate of and net floor area (NFA) of 500,000 sq ft the overall occupancy rates remained
approximately 11,280 sq ft. and 350,000 sq ft respectively. fairly stable at 90.9% (2H2016: 91.6%)
Office buildings slated for completions Paramount Corp Bhd’s mixed use and 77.8% in 1H2017 (2H2016: 78.6%),
in 2H2017 include JKG Tower in KL City; development at the former site of KDU supported by improved connectivity
South Point Office and Setia Tower in KL University College at Jalan Universiti, following the completion of rail
Fringe; and Menara Star 2 and Block J of Petaling Jaya, is expected to be launched infrastructure works, namely the LRT
Empire City in Beyond KL (Selangor). in the middle of the year. The 2.1-hectare extension line and phase one of the
project, called Atwater, has an estimated Sungai Buloh-Kajang MRT Line 1.
In 1H2017, there were several notable
office related announcements. GDV of RM730 million and will comprise Rentals
two office towers (of 16 and 17-storey
The strategic partnership of Naza TTDI high), two residential towers (a 30-storey During the review period, the average
Sdn Bhd and Triterra Metropolis Sdn achieved rental rates in both KL City
family-oriented tower and a 38-storey
Bhd, has unveiled The MET Corporate and KL Fringe dipped marginally to
serviced-suite tower) and retail lots.
Towers on a 2.47-acre site identified as RM6.04 per sq ft and RM5.69 per sq ft
Met 8, one of the eight precincts within OCCUPANCY respectively.
the 75.5-acre integrated development However, the average achieved rental
During the review period, the overall
of KL Metropolis in Jalan Duta. The rate Beyond KL (Selangor) remained
occupancy rate for KL City continued
development consisting of a 42-storey stable at RM4.13 per sq ft.
its decline to record at 80.7% (2H2016:
Tower A and a 30-storey Tower B with
82.8%) as the high supply pipeline Despite a slow office market
net saleable areas of 450,000 sq ft
and 150,000 sq ft respectively, has an
estimated gross development value TABLE 4
(GDV) of RM650 million. It is slated for Selected Grade A Office Asking Rentals
completion by 2021. Tower A, targeted at
retail buyers and investors, offers office
suites ranging from 818 sq ft to 2,584
sq ft on Executive levels, 3,606 sq ft to
4,231 sq ft on Premier levels and 16,104
sq ft per floor on Prestige levels, priced at
about RM900 per sq ft. The developer is
looking to sell Tower B to a single buyer.
Sunrise Innovation Sdn Bhd, a wholly-
owned subsidiary of UEM Sunrise Bhd,
will undertake a mixed development
project on the site of the Malay College
Old Boys Association (MCOBA) at Jalan
Seputeh, off the Federal Highway.
The proposed development with GDV
estimated at more than RM750 million,
will feature a new office building, a
banquet hall with a capacity for 1,200
persons and two blocks of serviced
apartments together with other
supporting facilities.
Anzo Holdings Bhd, via its wholly-owned
subsidiary Harvest Court Properties Sdn
Bhd, has entered into a Collaboration
Agreement with landowner Captive
Max Sdn Bhd for a joint development
in Petaling Jaya, Selangor. With an Source: Knight Frank Research
6
real estate highlights malaysia
performance, well located Grade A office of all-in-one business management property, located along Jalan Ampang, is
space in Kuala Lumpur, continued to software solutions for retail and hospitality within walking distance to Suria KLCC.
command higher asking gross rents, companies of all sizes, has opened its
AmanahRaya Real Estate Investment
ranging from RM7.00 per sq ft to Malaysian office at Meritus Tower, Oasis
Trust (AmanahRaya REIT) continues to
RM15.00 per sq ft per month. Corporate Park in Petaling Jaya, Selangor.
look for investment opportunities in this
Notable office openings and occupier INVESTMENT ACTIVITY weak market. The REIT, which formed a
movements during the review period strategic alliance with Kenedix Asia (a unit
include the following: During the review period, the investment
of the largest independent Japanese real
market was fairly active with several
estate asset management firm) early this
Swiss Re Corporate Solutions has office buildings under offer and in
year, is looking to acquire a commercial
opened a new office at Naza Tower @ negotiation stage. Some of these older
property (office tower) in Kuala Lumpur,
Platinum Park in Kuala Lumpur. The office assets offer refurbishment and
commercial insurance arm of Swiss Re valued at between RM350 million and
redevelopment opportunities and they
Group offers innovative, high-quality RM370 million in the near term.
include Menara Prudential in KL City
insurance capacity to mid-sized and large and Wisma MCIS and annexe block in Meanwhile, Affin Holdings is in the
multinational corporations across the Petaling Jaya. final stages of discussion to dispose
globe. its office tower in Shah Alam to Serba
Property investment and holding
Pegasus Agriculture group, one of Dinamik Holdings Berhad. Located in
company, KL 33 Properties Sdn Bhd,
the leading owners and operators of Seksyen 14, the 16-storey building with a
is acquiring Menara Prudential from
hydroponic farming facilities in the 4-storey basement has a net book value
OCBC Properties (M) Sdn Bhd for a
Middle East and North Africa (MENA), consideration of RM125 million (or circa of RM38.25 million. The bank has been
has opened a new office in Kuala Lumpur RM759 per sq ft over 164,706 sq ft NLA). leasing the offices at Menara Affin located
(Menara Darussalam). Located along Jalan Sultan Ismail in the along Jalan Raja Chulan as headquarters
city’s financial district, the 24-storey for the last 40 years.
Square Yards, a global real estate and
building serves as the head office for The most anticipated property transaction
aggregation platform, has opened a new
its anchor tenant, Prudential Assurance for the remaining of this year is the sale
office in Kuala Lumpur (Q Sentral)
Malaysia. of Vista Tower, the final component of
Feilo Sylvania, full-spectrum provider of
In June, Wisma Selangor Dredging, The Intermark integrated development
professional and architectural lighting
comprising four blocks of office buildings located at Jalan Tun Razak, Kuala
solutions, has opened its Southeast Asia
connected by a fountain courtyard, atop Lumpur. The 62-storey office tower offers
hub in Kuala Lumpur. The regional office
two levels of basement car park, was 550,000 sq ft of NLA with typical floor
is located in Wisma UOA Damansara II.
sold for RM480 million (or circa RM1,323 plate ranging from 11,000 sq ft to 11,900
LS Retail, a world-leading provider per sq ft over 362,782 sq ft NLA). The sq ft.
FIGURE 2
Occupancy and Rental Trends 1H2012 – 1H2017
Source: Knight Frank Research
7
TABLE 5
Office Investment Sales (1H2017)
Building Name Location Approx. Lettable Consideration
Area (sq ft) (RM per sq ft)
Menara Prudential1 Jalan Sultan Ismail, 164,706 759
Kuala Lumpur
Wisma Selangor Dredging2 Jalan Ampang, 362,782 1,323
Kuala Lumpur
1KL 33 Properties Sdn Bhd has proposed to acquire Menara Prudential, a 24-storey Grade A office building, from OCBC Bank (M) Bhd at a consideration of
RM125 million.
2Selangor Dredging Berhad has entered into a conditional Sale and Purchase Agreement with Golden Eagle Realty Sdn Bhd for the proposed disposal of Wisma
Selangor Dredging on 21st June 2017 for a total consideration of RM480 million. The freehold property comprises four blocks of commercial building with 2 levels
of basement car park (459 bays).
Source: Knight Frank Research
OUTLOOK negotiations in this tenant-led market. banking sectors are expected to remain
challenging while for IT, recruitment ,
Amid widening mismatch between supply The scheduled full completion of the
e-commerce and shared services sectors,
Sungai Buloh-Kajang MRT Line 1 by july
and demand, both rental and occupancy more inquiries and leasing activities are
this year, is expected to boost demand
levels continue to be under pressure. expected.
for offices in established and upcoming
Landlords are stepping up on their
decentralised office locations.
marketing efforts to improve occupancy
levels while being more flexible in New take-ups from oil & gas and
8
real estate highlights malaysia
HIGHLIGHTS KLANG VALLEY RETAIL MARKET
Retail sales for 1Q2017 dipped
Market Indications Darby Property is scheduled to open
1.2% when compared to the in July. The 8-level shopping centre
corresponding period in 2016 as The MIER Consumer Sentiment Index
with 1,900 car park bays has a NLA of
consumers continue to remain (CSI) remains weak below the threshold 620,000 sq ft and targets a catchment of
cautious in their spending amid level of 100 points despite improving over 740,000 residents. Its anchor and
rising cost of living. to register at 76.6 points in 1Q2017 key tenants include Toys “R”Us, Village
(4Q2016: 69.8 points). Grocer, Golden Screen Cinemas, Fitness
Cumulative retail stock increased Two years on after the implementation First, MPH,Padini Concept, Brands
1.1 million sq ft with the Outlets, SenQ, Daiso, Kidz Zone and
of the Goods and Services Tax (GST)
Lifestyle Foodcourt. The mall targets to a
completion of MyTown Shopping in 2015, the performance of the retail
catchment of over 740,000 residents.
Centre in 1Q2017. industry continues to remain lacklustre.
By the end of 2017, another five shopping
Malaysia retail sales which expanded by
centres, namely, Empire City Mall (to be
Foreign retailers including online 1.7% in 2016 continues to retreat amid
opened in phases), KL Eco City Podium,
retailers continue to make inroads rising cost of living, recording a 1.2%
Amerin Mall (Cheras Selatan), Melawati
into the local retail scene. contraction in 1Q2017. Mall and Evo Shopping Mall are slated
for completion. Collectively, they will offer
Supply & Demand
In respond to challenges in total NLA of circa 3.52 million sq ft.
the retail market, operators The cumulative supply of retail space in
Klang Valley retail supply continues to
are taking proactive measures Klang Valley stood at circa 56.59 million
expand rapidly despite growing challenges
to refurbish, reconfigure and sq ft as of end 1H2017 following the
in the industry.
reposition their shopping centres completion of MyTown Shopping Centre.
to improve footfalls and maintain However, with market dilution and
MyTown Shopping Centre, which opened growing competition, developers and
competitiveness. on 16th March, is a joint development operators of selected existing shopping
between Boustead Group and Ikano Retail centres are seen to be taking the
Changing retail landscape sees Asia. Anchored by Ikea, the 5-storey opportunity to refresh their outlets to keep
the proliferation of outlet malls in shopping centre with 1.1 million sq ft of pace with changing customers’ tastes and
Klang Valley and beyond. space features an al-fresco dining area preference.
and a park. Key tenants include Zara,
In the vibrant Bandar Utama - Mutiara
Food Empire, Golden Screen Cinemas,
Damansara corridor, which is expected
H&M, Parkson Department Store, Kaison
to witness heighten competition with the
and Village Grocer.
impending completion of Empire City
Melawati Mall, which is jointly developed Damansara Mall offering 2.3 million sq ft
by CapitaLand Mall Asia Ltd and Sime NLA, the 14-year old IPC Shopping Centre
FIGURE 3
Existing Cumulative Supply of Shopping Mall (Net Lettable Area)
(1H2017)
Source: Knight Frank Research
9
Source: Knight Frank Research
in Mutiara Damansara is undergoing a boutique while the popular French bakery,
TABLE 6 centre-wide facelift and upgrade. To be Paul, has also opened its first Kuala
Shopping Centres Scheduled for completed by year-end, the upgrade Lumpur outlet there. Lego Malaysia’s
Completion / Opening in 2017 will see the relocation of tenants and the latest store, its seventh outlet measuring
addition of new tenants. There will be more 3,000 sq ft, provides an interactive
1H2017 - variety of F&B options, new sports outlets, and vibrant shopping experience to its
New Completion / Opening new fashion retailers and a new outdoor enthusiasts, both children and adult.
alfresco dining area amongst others.
American clothing store, Chaps, by
MyTown Shopping Centre
In the city centre, the 26-year old Lot 10 fashion icon, Ralph Lauren, has opened
KL Fringe
Shopping Centre is mid-way through its three outlets – at Pavilion Elite, 1Utama
1.10 mil sq ft
make-over which began in June last year. Shopping Centre and MyTown Shopping
The rejuvenation, with the motto ‘Meet. Centre with another four stores targeted to
Play.#LoveLot10”, is grounded on four open within the year.
key characteristics – youthfulness, fun,
Hong Kong luxury brand, Luk Fook
creativity and connectivity. It is targeted at
Jewellery, also made its double debut in
tech-savvy Millennial and GenY patrons.
Malaysia, opening two stores – at Pavilion
The extensive transformation works,
Elite and Suria KLCC.
slated for completion by the last quarter
of 2017 will also see Lot 10 offering WiFi During the review period, Suria KLCC also
access and a newly launched app for the welcomed several notable tenants such
MyTown Shopping Centre latest updates and news on the mall. The as Tory Burch, Brook Brothers, Hyper
former icon is on track to be a catalyst for Gear and Sunglass Hut. It also home to
2H2017 - the Bukit Bintang retail and entertainment Omega’s fourth boutique.
Expected Completion / Opening district.
Over at Tropicana City Mall, Oliver
Subang Parade, the first regional shopping Gourmet, the first home-grown gourmet
Melawati Mall* centre in Selangor which opened in 1988, food hall, has made its maiden entry.
KL Fringe is undergoing an asset enhancement Besides its wide range of gourmet
620,000 sq ft initiative (AEI) that will create an additional products, it also offers wine selection,
20,000 sq ft of NLA upon its completion bakery, deli and in-house dining facilities.
KL Eco City Retail Podium in 2018.
Marks & Spencer (M&S) has launched a
KL Fringe
Aeon Co (M) Sdn Bhd will also continue premium boutique concept in Sunway
200,000 sq ft
to renovate its existing malls and stores Velocity Mall, the first of its kind in the
Amerin Mall (Cheras Selatan) to cater to changing lifestyle demand country. Occupying more than 10,600
of its customers. A notable upcoming sq ft, the boutique has a food hall and
Selangor
renovation at its Taman Maluri store, in-store bakery offering coffee and tea
155,600 sq ft
estimated to require capital expenditure alongside breads and pastries.
Evo Shopping Mall of RM300 million, is expected to complete
Japan’s Doutor Coffee has also opened at
Selangor by 1Q2019.
Sunway Velocity Mall. Its two other outlets
251,000 sq ft Despite mounting challenges in the are located at Aeon Bukit Tinggi and Aeon
business operating environment, foreign Tebrau (Johor Baru).
Empire City Mall** and local players continue to expand and
Following a dispute with its Taiwanese
Selangor foray into the retail scene.
franchisor, La Kaffa International Co Ltd,
2.3 mil sq ft
Pavilion Kuala Lumpur Mall saw the Malaysia’s Loob Holdings Sdn Bhd, has
debut of Pleats Please by Issey Miyake, rebranded more than 100 of its former
French Bakery Laduree, Blanc Eyelash Chatime outlets to Tealive.
and the reopening of Braun Buffel. The
Meanwhile, Chatime Malaysia, via its
premier mall is also home to Aveda’s
newly appointed master franchisee,
second outlet in Asia Pacific where the
Will Group, is planning a RM35 million
new concept store features six experience
expansion plan.
zones. The repositioning of some of the
mall’s tenant mix since last year also saw Fashion and F&B related trades are no
*Melawati Mall is completed but scheduled to the entry of new tenants that include Dior, longer the key to increase footfalls in
open in 2H2017 Cartier, Calvin Klein Performance, Geox, shopping centres. With the growing
**Empire City Mall is scheduled to open in phases. Banila Co, Blackbarrett, Daniel Wellington, popularity of online shopping, consumers are
The venue for ice hockey and figure skating will be Getha, Fitflop, and Go Noodle. seeking more experience when visiting malls.
opened in conjunction with the SEA Games 2017.
At the adjoining Pavilion Elite, YSL Beaute The former car park at Level 5 of Sungei
Source: Knight Frank Research has officially opened its first flagship Wang Plaza has been transformed into
10real estate highlights malaysia
an indoor kart zone. Blastacars®, which Secret Beauty, Pedro, Charles & Keith, Outlook
originates from New Zealand, features a Bath and Body Works and Flow.
208m track that is suitable for racers aged The retail industry outlook remains
In 2016, the average occupancy level for subdued in the short to mid-term. Retail
above 8 years old. The entertainment floor
shopping centres in Kuala Lumpur dipped Group Malaysia maintained its projection
also offers virtual reality experiences and a
slightly to 86.9% (2015: 87.4%) while for of retail sales growth at 3.9% for 2017 as
shooting battle zone.
Selangor, there was a higher increase consumers continued to tighten their belts
The upcoming Empire City Damansara in vacancy with 2016 occupancy level amid rising cost of living and weak job
mall will be home to a new virtual reality dropping to 84.7% (2015: 87.9%) (source: market.
(VR) theme park concept. To be operated NAPIC).
by US VR Global Inc, the 170,000 sq ft Besides asset enhancement initiatives
Prime and regional shopping centres such (AEIs), developers and operators are
Hero Central Park, is set to be one of the
as Suria KLCC, Pavilion Kuala Lumpur continuously refreshing their tenant and
world’s largest reality theme parks. The
Mall, Mid Valley Megamall, The Gardens trade mix to remain competitive in a
first phase is scheduled to open its door in
Mall, and Sunway Pyramid Shopping diluted retail market.
the first quarter of next year.
Mall continue to maintain high occupancy
The country’s retail landscape continues levels of 95% and above. Moving forward, we continue to see
to transform. more retailers embracing the concept of
Meanwhile, the occupancy rates for
‘clicks and mortar’. Spanish clothing and
Johor Premium Outlets (JPO) by Genting suburban malls such as The Mines,
accessories retailer, Zara, has started its
Simon Sdn Bhd, which opened in Tropicana City Mall and Subang Parade
online sales in Singapore and Malaysia
December 2011, was the first premium range from about 91% to 94%.
while Cosway (M) Sdn Bhd has launched
outlet centre in Malaysia and South
East Asia. Its popularity has led to a Prices and Rentals its online mall.
proliferation of outlet malls across the Early this year, the 5-storey Empire Similarly, consumers shopping for
country’s central and northern regions. Shopping Gallery was sold to Pelaburan household essentials and home furnishing
Hartanah Berhad (PHB) for a consideration at SSF can also do so in the comfort
In May 2015, Mitsui Outlet Park (MOP),
of RM571.9 million (or circa RM1,714 per of their homes via Lazada and www.
a Japanese venture, opened near KLIA
sq ft on 333,349 sq ft NLA). The vendor, ssfhome.com.
airport in Sepang; followed shortly in
November by a British venture opening Couture Homes Sdn Bhd of Mammoth Sports Direct is also looking to expand
Freeport A’Famosa Outlet (FAO) in Empire Group has been granted a call its online services, which is currently only
A’Famosa Resort, Melaka while Penang option to buy back the mall on the fifth available through Lazada.
Design Village, a local venture, opened in anniversary of the sale. It also has the first
November 2016. right refusal to buy the mall should PHB Align with the growing e-commerce
decide to dispose of it within five years. market; 7-Eleven has become the first
June 2017 saw the opening of the latest
retailer in Malaysia to accept the Alipay
outlet mall. The Genting Highlands On the whole, rents were flat during the mobile wallet payment as a means of
Premium Outlets (GPO), also by the review period. cashless payment from mainland Chinese
pioneer operator, offers circa 275,000 sq
Only selected prime and regional tourists. In the coming months, Berjaya
ft of NLA. The hilltop outlet features over
shopping centres such as Suria KLCC and Corporation will also roll out Alipay in
some 150 designer brands.
Mid Valley Megamall continue to achieve their merchants of over 5,000 outlets
Meanwhile, in the Sepang locality near higher average gross rentals (on per sq nationwide that include Starbucks, Kenny
MOP, Horizon Village Outlets (HVO) Rogers, and Cosway.
ft basis) from new tenants and lease
[formerly known as (KLIO)] is set to
renewals. The monthly gross rental range The economic recovery with higher
complete by mid-2018. Boasting a
from RM15.00 per sq ft to RM25.00 per sq GDP posting in 1Q2017 and the recent
European theme, the outlet with 400,000
ft on average. strengthening of the local currency may
sq ft NLA, has reportedly secured notable
tenants and brands such as Giuseppe Less popular suburban and secondary lift consumer sentiment and improve retail
Zanoti Design, Tumi, Swiss Watch Gallery, shopping centres, faced with heightened sales going forward.
La Martina, Tory Burch, Michael Kors, competition and market dilution, see lower Malaysia continues to be on the radar for
Kate Spade New York, Godiva, Victoria rental levels and negative rental reversion. retail investment worldwide. The country
is ranked third in the 2017 Global Retail
Development Index (GRDI) for the second
consecutive year, after China and India.
Its high ranking by global management
consulting company, A.T. Kearney, is
attributed to the influx of tourists, higher
disposable income and government
investments in infrastructure, all of which
Blastacars® at Sungei Wang Plaza
had boosted the local retail industry.
11HIGHLIGHTS Penang Property Market
Retirement Fund Inc (KWAP) has Market Indications comparison of 1Q2017 vs 1Q2016, there
taken up a 20% stake in Eastern is a large improvement of 39.6% for the
& Oriental Bhd’s (E&O) second The latest figures released by the commercial sector with contraction at
phase of Seri Tanjung Pinang National Property Information Centre 1.2% (residential), 10.6% (agricultural),
(STP 2A) in a deal worth RM887.7 (Napic) for 1Q2017 show that the total 17% (development lands) and a huge
million. volume of transactions for all sectors 70.7% for industrial. The huge decreases
in Penang State contracted 16.6% in in the industrial sector may be attributed
1Q2017 versus 4Q2016 as against a to the sales of two large industrial
STP 2A, currently undergoing drop of 6.1% compared to 1Q2016. facilities in 2016.
reclamation works for 252.8 In terms of value of transactions, the
acres, is scheduled to complete IJM Perennial Development Sdn Bhd,
decreases of all sectors for 1Q2017 are
by June 2018. The net area for a joint-venture (JV) between IJM
recorded at 25.6% and 11% compared
development will be about 169.9 Corp Bhd and Perennial Real Estates
with 4Q2016 and 1Q2016 respectively.
acres. Holdings Ltd, has officially unveiled
Residential transactions in 1Q2017 which
The Light City, a large-scale integrated
made up 72.2% [was 69.6% & 72.7%
mixed-use waterfront development in
Prasarana Malaysia Bhd, a federal in 4Q2016 & 1Q2016 respectively] of
Glugor, on the eastern coast of Penang
government linked company, will the total volume, recorded a drop of
Island. Positioned as Penang’s premier
officially take over the running 13.5% and 6.8% compared with 4Q2016
integrated waterfront precinct with a total
of Penang’s ferry services from and 1Q2016 respectively. In terms of
GDV of over RM4.5 billion, The Light City
current operator Penang Port value of transactions done in 1Q2017,
will have a total gross floor area (GFA) of
Commission Sdn Bhd wef July residential transactions made up 59.0%
about 4.1 million sq ft which will comprise
2017. as compared with 50.6% in 4Q2016 and
the Penang Waterfront Convention
53.3% in 1Q2016. Similarly, the value of
Centre (PWCC) with 270,000 sq ft of GFA
residential transactions also dropped –
sitting atop a five-storey retail mall with
12.9% (1Q2017 vs 4Q2016) and 1.2%
1.5 million sq ft GFA; two luxury hotels of
(1Q2017 vs 1Q2016). For the period
37-storey high with a total of 745 rooms;
compared, 1Q2017 vs 4Q2016, all sub-
a 28-storey office tower with net leasable
sectors recorded declines in the number
area of 370,000 sq ft located next to the
of transactions done ranging from 6.6%
hotels and two residential projects, being
(agricultural) to 45.4% (Industrial). When
The Mezzo and The Essence. The Mezzo
compared to 1Q2016, the differences
will comprise two 34-storey residential
are varied with improvements of 3.8%
towers with 456 units in spacious built-up
for commercial properties and 7.3%
sizes, while The Essence will comprise
for development lands in contrast to
two 37-storey residential towers with 315
decreases of 6.8% (residential), 13.3%
units with contemporary façade design.
(agricultural) and 27.4% (industrial).
In terms of value of transactions for PLB Engineering Bhd plans to develop a
1Q2017 vs 4Q2016, all sectors except RM2.6 billion affordable housing project
agricultural (improvement of 17.6%) on a 113-acre site in Paya Terubong
recorded drops ranging from 12.9% for on Penang Island which will see 7,658
residential to 54.3% for industrial. For affordable units, priced between
Reclamation works off Gurney Drive
12real estate highlights malaysia
RM300,000 and RM390,000, launched in unveiled its “Factory in a Forest” - a new giving a GDV of RM90 million. Slated to
stages over a 6-year span. The company eco-friendly 162,000 sq ft manufacturing complete in 1Q2019, it is understood that
targets to kick-start an initial 1,280 units facility in the Penang Science Park. The more than 87% of the units have been
with a total GDV of RM450 million in company intends to put in an investment taken up.
2017. of US$16 million (RM71.5 million).
There are even lesser recorded
On the island, Kerjaya Prospek Property High-End Condominium transactions of high-end condominiums
plans to develop “Penang Straits in the secondary market in 1H2017
There are no launches of high-end
Residence” on a one-acre site in Seri compared to 2H2016 as against the
condominiums on the island in 1H2017.
Tanjung Pinang with an estimated GDV of period of 2H2016 versus 1H2016. In
RM300 million. The proposed 28-storey Medium-end condominium developments Tanjung Bungah, one large unit sized
tower housing 246 units of serviced launched during this period include Setia 5,220 sq ft at Springtide Residences
apartments (circa 800 sq ft) each, to be Sky Ville in Jelutong which comprises was transacted at RM824 per sq ft in
managed by Eastern & Oriental Bhd, 2 blocks of 33-storey condominiums comparison to a 4,327 sq ft unit at Infinity
has an indicative average selling price of with 550 units selling from RM758,000 Condominium which was sold at RM971
about RM1,200 per sq ft, with a minimum a unit upwards or from RM750 per sq ft per sq ft in late 2016. Smaller sized units
selling price of RM1 million per unit. to RM950 per sq ft for units sized from of 3,498 sq ft at 11 Gurney, Gurney Drive
In mainland Seberang Perai, Hua Yang 1,036 sq ft to 1,750 sq ft. were re-sold at prices of RM778 per sq
Bhd plans to launch three new projects ft to RM858 per sq ft in 1H2017. Past
For high-end products, Eastern & Oriental
over the next three years with a total transactions in Year 2016 for smaller
Berhad (E&O), has launched “Ariza
estimated GDV of RM800 million. The sized units of 2,000 sq ft to 2,669 sq ft in
Seafront Terraces” – the final phase of
projects include the new phase of Gurney Paragon and Quayside Condo,
landed houses in Seri Tanjung Pinang.
Meritus Residensi in Seberang Perai, a Seri Tanjung Pinang were recorded at
This development will feature 35 units
4.9-acre land in Bukit Mertajam and a the price range of RM1,000 per sq ft to
of 2½-storey terraced houses with
9.2-acre land in Juru. Following good RM1,150 per sq ft.
built-up areas ranging from 3,488 sq ft
response to the first phase of Meritus (intermediate units) to 3,781 sq ft (corner Buyers of high-end condominiums
Residensi, a 44-storey residential building units) which are up for sale at prices have higher expectations; thus, many
with 480 units of serviced apartments starting from RM2.19 million onwards, of the newer launches offer units which
launched last January, phase 2 of Meritus
Residensi with a total GDV of RM104
TABLE 7
million will feature 16 units of stratified Asking Gross Rental of of Selected Purpose-built Office Space on Penang
double-storey shoplots and 148 units of
low density condominiums. Hua Yang
is planning high-rise residential projects
for the Bukit Mertajam land and a mixed
development for the Juru land.
Also in Seberang Perai, Exopuri
Development Sdn Bhd has started work
on its Exo City @ Juru Sentral project
with a GDV of RM400 million. This project
comprises Holiday Inn & Suites Penang
Prai - a 35-storey hotel with a total of
288 rooms to open in 4 years’ time; Exo
Residences - a 31-storey apartment
block with 146 units; Exo Avenue – 14
units of 4-storey and 3 units of 7-storey
shop-office; Exo Horizon - a 39-storey
studio office block with a total of 175
units and Exo Walk - 22 units of double-
storey semi-detached food and beverage
outlets, which is in its final stages of
completion.
Paramit Corp, which provides fully-
integrated design, engineering,
manufacturing and post-manufacturing
services to medical device and life
science instrument companies, recently Source: Napic / Knight Frank Research (as of June 2017)
13are fitted out with built-in cabinets to slightly to 97%, up from 95% in 2H2016. City, a large scale integrated waterfront
bedrooms, kitchen cabinets c/w hood development by IJM Perennial Sdn Bhd.
Rentals for some of the newer office
/ hob / electrical items as well as light Another application under consideration
buildings have also increased; tenancies
fittings, air-conditioning units and quality by the State Government is the proposed
at Hunza Tower are now renewed at
sanitary fittings. shopping mall on the former site of the
RM3.80 per sq ft per month compared
Lee Rubber factory in Paya Terubong by
Asking rents are noted to be stable with RM3.50 per sq ft per month in
Sunway City (Penang) Sdn Bhd.
compared to 2H2016. For larger sized 2H2016. At Menara IJM Land, we
units in Tanjong Bungah, asking rents understand that rentals have been Over in Batu Kawan on mainland
generally range from RM1.10 per sq ft increased by 5%. Seberang Perai, Ikano Private Limited has
to RM2.00 per sq ft per month whilst the commenced works on its new IKEA store
Office buildings under planning on
upper band of asking rents are also noted early this year with completion scheduled
Penang Island include the 28-storey
to be stable, ranging from RM2.10 per sq for late 2018.
office tower with a net leasable area of
ft to RM2.60 psf per month. For similar
370,000 sq ft under The Light City mega The several proposed shopping malls
sized units in Gurney Drive, asking rents mixed-development waterfront project coming up over the next 5 years on the
vary from RM1.90 per sq ft to RM2.80 and Aspen Group’s planned Beacon island are as listed in Table 9 below.
per sq ft per month. For smaller sized Executive Suites which will feature a
units in Tanjong Tokong and Gurney City Mall, the retail podium on which City
30-storey small office home office (SoHo)
Drive, asking rents are in the range of Residences sit on, is expected to open
development with a total of 227 furnished
RM2.20 per sq ft to RM2.90 per sq ft for business in 2018. Sunshine Tower
executive units with standard size of 980
per month whilst some landlords are still in Bandar Baru Air Itam and the retail
sq ft on the upper levels and four retail
asking higher rents of RM3.00 per sq ft to component of The Wave, Phase 3 of
lots on the ground level.
RM3.80 per sq ft per month. Penang Times Square are currently under
RETAIL construction with completion expected in
OFFICE The existing supply of purpose-built
2019 and 2020 respectively. Phase 4 of
Penang Times Square which will have a
The existing supply of office space shopping space on Penang Island
retail component is under planning stage.
(buildings of 10-storey and above) on remains unchanged at 2H2016’s level of
Penang Island for 1H2017 now stands 6.69 million sq ft. No new purpose-built Occupancy rates for the prime shopping
at 5.71million sq ft with an additional shopping malls were completed on the malls on the island range from 80% to
115,000 sq ft from the completion of island in 1H2017. 98% whilst for the secondary shopping
Straits Quay Commercial Suites at malls, the range is generally from 70% to
The Penang State Government has, for
Tanjung Tokong. 90%.
the last few years, ”frozen” development
The occupancy rates for the four prime of shopping malls so as not to create In the prime shopping malls, rental rates
office buildings monitored in Georgetown an oversupply situation. All applications for ground floor retail lots generally
have improved slightly upwards to for shopping mall development must range from RM13.00 per sq ft to above
the range of 90% to 100% compared first obtain special permission from the RM35.00 per sq ft per month, depending
to 2H2016’s range of 80% to 100%. State Government before proceeding on the mall, location and size of the units.
Similarly for the newer buildings located to the local government for approval.
out of Georgetown, namely One Precinct, However, such permission has been OUTLOOK
Suntech and Menara IJM Land, average forthcoming in the case of a proposed With the continuing decline in the volume
occupancy rates have also crept up retail mall in the upcoming The Light and value of transactions, the property
TABLE 8
Future Supply of Retail Space within Penang Island
Note: *under construction ** planned
Source: Napic / Knight Frank Research
14real estate highlights malaysia
Penang Ferry
market sentiments are still very much residential sector still in consolidation a huge challenge to mall owners and
subdued. mode. The office sector, where some landlords who are facing the unenviable
buildings have achieved slight increases task of trying to keep both occupancy as
Nevertheless, the launching and
in occupancy levels and rentals, is well as rental levels up.
commencement works of some of the
providing some comfort to an otherwise
larger scale integrated developments The challenging overall market
dampened property market.
such as The Light City and Aspen Vision environment is expected to continue over
City have given some degree of positive In the retail sub-sector, whilst the the next few quarters.
sentiments to the medium and longer increasing supply of shopping mall
term prospects. space and opening of new outlets may
be a boon to consumers, it is becoming
Overall, the market is lacklustre with the
15HIGHLIGHTS Johor Bahru property Market
As of 1Q2017, total cumulative Market Indications Despite being impacted by the capital
control policy, the developer with strong
committed investment in Iskandar According to 1Q2017 data from the financial and construction background,
Malaysia stands at RM227.67 National Property Information Centre has commenced work on the second
billion. (NAPIC), the volume and value of phase which includes three international
transactions for Johor fell by 4.6% and standard 18-hole golf courses, luxury
Aramco and Petronas have signed 24.2% respectively, when compared to hotels and low-density residential
a RM31 billion deal for the RAPID 1Q2016. buildings.
project. There was a 6.8% decline in the Jade Palace, another Chinese
transaction volume for the residential development by Greenland Group, has
Bukit Pelali and Bandar Penawar sub-sector while the industrial sub-sector, also been affected with its construction
township developments recorded bucked the trend by posting a sharp progress slowing as the developer
strong take up rates due to increase of 75.5% (1Q2016 to 1Q2017) in reviews the project to adapt to the
proximity to the RAPID project. transaction value. challenging market condition.
As of 1Q2017, total transacted FIGURE 4
value of industrial properties Total Cumulative Investment in Iskandar Malaysia (2006-1Q2017)
increased 75.5% year-on-year
(y-o-y).
Source: Napic / Knight Frank Research
Market Highlights Residential
Following earlier reports of Saudi The residential sector continues to
Aramco’s withdrawal of interest in the remain dominant in 1Q2017, accounting
RAPID project in Pengerang, all doubts for 63.1% of the total transactions in
were put to rest when it signed a mega Johor, although the transaction volume
deal worth RM31.1 billion with Petronas was 6.8% lower y-o-y.
in February.
The most active district is Johor Bahru
In March, news of China’s bid to curb with 49.5% share in transaction volume,
capital flight broke and Forest City’s followed by districts of Batu Pahat and
rapid growth hit a speed bump. Some Kluang with 10.0% and 8.6% share
China-based buyers suddenly found respectively. In terms of property type,
their investments untenable. The master terraced houses proved to be most
developer, Country Garden Holdings, has popular, accounting for 61% of total
since widen its target market to include residential transactions in the Johor
global investors. Bahru.
As of May 2017, Country Garden has Spurred by activities in the PIPC
already handed over 132 residential units and RAPID projects, two residential
under Kylin Apartments to the respective developments have been launched in the
owners from various countries. surrounding area.
16real estate highlights malaysia
Taman Sri Penawar by MB Group is a Puteri Harbour has a GDV of RM4 billion open its doors in November and is set
470-acre township development with and is being developed in 12 phases over to be the largest regional mall in Johor
an estimated gross development value a period of about eight years. The units with an estimated 1.3million sq ft of net
(GDV) of RM1.9 billion. Located in Bandar sized between 1,916 sq ft and 8,331 sq ft lettable space. IKEA will be opening its
Penawar, Phase 1 of the development, are priced from RM3.1 million to RM10.5 first Malaysian outlet outside of Selangor
offering landed residential units and million each. around December. Located next to the
shophouses has been well received. bustling Aeon Tebrau City, it is a highly
RETAIL anticipated development and is likely to
The other project, Bukit Pelali @
Pengerang, is a joint-venture (JV) As of 1Q2017, total retail space in Johor attract large crowds upon opening.
between Astaka Padu Sdn Bhd and stood at 18.97 million sq ft, a 3.5%
Saling Syabas Sdn Bhd. This 363-acre increase y-o-y (1Q2016: 18.33 million OFFICE
mixed use township development, with sq ft). Two-third (65.5%) of the retail The total supply of purpose built office
estimated GDV of RM2.3 billion, features stock comes from Johor Bahru. Overall space in Johor was recorded at about
landed and high-rise residential units occupancy dipped marginally to record at 12.22 million sq ft as of 1Q2017, circa
as well as commercial and educational 75.6% in 1Q2017 (1Q2016: 75.9%). 4.7% increase y-o-y. The bulk of supply
facilities. totalling circa 9.45 million sq ft is located
SKS Mall by SKS Group commenced
in Johor Bahru district, followed by Batu
In March, Country Garden Holdings Co operations in March. Located in Desaru,
Pahat with 0.89 million sq ft supply.
Ltd, together with Damansara Realty, Bandar Penawar, the 2-storey shopping
launched their JV project in Tampoi. mall on a 6.16-acre site has a total built-up The supply of office space is set to
Spanning across 53 acres, Central Park area of about 130,680 sq ft. The retail increase over the next few years as
with GDV estimated at RM4.6 billion, lots sized from 236 sq ft to 1,921 sq ft on-going developments in Johor Bahru
offers affordable homes targeted at local are currently about 80% occupied with City Centre and Medini move closer to
home-buyers. The first phase of the average rentals ranging from RM5.00 to completion.
project is expected to complete by 2020. RM9.00 per sq ft per month depending on
Menara JLand by Johor Land Berhad
In January, Haute Property Sdn Bhd, a location, sizing and other factors.
is set in a prime city centre location.
JV between BRDB Developments Sdn 2H2017 will see the opening of 3 new The Grade A office development with
Bhd and UEM Sunrise Bhd, handed over retail malls in Johor Bahru which are GBI Gold certification and built to
completed units for Phase 1 of Emerald the AEON Kempas, Paradigm Mall and MSC specifications, represents a new
Bay. The 111-acre freehold project in IKEA. Paradigm mall is expected to generation of office space catering to
FIGURE 5
Retail Supply and Occupancy Trend in Johor Bahru (2006 - 1Q2017)
Source: Knight Frank Research / NAPIC
17discerning tenants in the Johor Bahru Petropolymer Sdn Bhd, a glove office space in the city centre. Overall
market. Standing at 37-storey, the office manufacturer, has entered into an office rentals have generally improved
tower with about 262,592 sq ft NLA agreement with Permodalan Darul amid steadily. However, we note that
comes with an observation deck and Takzim (PDT) to build a new facility on a several new Grade A offices with Green
cafe at the roof/ top level. It is slated for 60.7-hectare land strategically located Certification and MSC status have already
completion by December 2017. near the RAPID project in Pengerang, set new benchmark with asking rentals
Kota Tinggi. above RM4.50 per sq ft per month.
A Corporation Intention Agreement has The retail sector is experiencing a rapid
been signed between Johor Corporation growth with at least three new malls
and Chinese company, Siasun Robot expected to open its doors by end of
Investment Pte Ltd, to transform a the year. Aeon Corporation (M) Bhd is
404-hectare land in Johor into a Robotics planning to expand in Johor with new
Future City worth RM15 billion. The sites in the pipeline. Most of its existing
agreement is one of the initiatives by the malls are doing extremely well with large
Johor government to promote Johor as a crowds during weekends and festive
hub for robotic industry in the region as seasons.
well as to support China’s Belt and Road
The trend is expected to continue into the
initiative which will benefit both countries.
second half of the year for most of the
This mega project is expected to
existing malls in Johor Bahru, especially
positively impact the surrounding areas.
those located in the suburban areas and
OUTLOOK city fringes.
The Johor property market has been The industry sector is also entering a
lacklustre since the beginning of the year challenging period with many completed
especially with China’s capital controls on schemes experiencing difficulty in
Menara JLand
outflow of funds to overseas investments. attracting purchasers and tenants,
especially for the terraced and semi-
INDUSTRY China developers have been investing
detached factories. Asking rentals of
heavily in massive residential projects, these factories have been competitive
For 1Q2017, the industrial sector in Johor
namely in the Danga Bay area, along and generally declining with anticipation
shows different trend where the volume
the coastal areas of the Straits of Johor of an impending slowdown in the sector.
of transactions declined (1.8%) whereas
and the 4–island Forest City project over Despite the gloom, there has been an
the value of transactions increase
the past five years. Potential buyers are increase in inquiries for industrial lands,
significantly about 75.5% compared to
mainly from mainland Chinese whilst large warehouses, logistics hubs and
similar period in 1Q2016. In terms of
locals have generally been selective on distribution centres in areas such as
volume of transactions, District of Johor
these projects especially with alternative Pengerang, the PTP and Senai.
Bahru (53.6%) and Kulaijaya (14.3%) are
choices from local developers. Interest
leading among other districts while for In conclusion, with the exception of the
value of transactions, District of Johor in high-rise residential properties has
somewhat slowed down with the financial retail sector, all sectors are entering a
Bahru recorded 53.4% from the total challenging phase with existing stocks
value, followed by Kulaijaya (18.7%). institutions imposing strict lending
to clear and new space to be taken up.
policies on these projects.
BMW Group has launched its new Prices and rentals are not expected to
regional parts and distribution centre. Local developers are bracing for an hold up and likely to take a dip to fill up
The RM130 million facility on a extended quiet period as potential the vacancies.
72-hectare land is located within the investors / buyers are now spoilt
On a brighter note, developments in
Free Trade Zone of Port Tanjung Pelepas for choice with numerous on-going
Pengerang are expected to continue as
(PTP) in Senai and provides support projects giving generous incentives and
lands are being acquired for expansion of
to 23 countries in the region including rebates.. Nevertheless, we noted that the
the oil and gas refineries and processing
Malaysia, Singapore, Thailand and secondary market for landed properties
facilities. Recent news of big investments
Indonesia. below RM600,000 per unit are still in
coming into the RAPID project has
demand.
Country Garden Pacific View Sdn Bhd is turned the area into a bustling hub. Road
set to build a RM2.6 billion Industrialised On the office sector, new office buildings infrastructure is currently being upgraded
Building System (IBS) factory on a are being constructed in the city fringes and will only serve to bring in more
109.5-hectare land in Forest City. The and also in Iskandar Puteri especially impetus to the region. Demand for the
factory, planned to have a total of 12 Medini being the hotspot. They are limited housing currently available has
lines, with three currently in operation, expected to be completed in the next two made prices there match other districts
will become the world largest IBS facility. to three years and will add to the existing closer to Johor Bahru.
18real estate highlights malaysia
HIGHLIGHTS KOTA KINABALU property Market
Improvements seen in Sabah Market Indications global economy.
property market in 1H2017.
Based on the Annual Property Market KKIP Sdn Bhd had signed a collaboration
Report 2016 released by the National proposal agreement with Malaysian
Abolishment of cabotage Property Information Centre (NAPIC), Biotechnology Corporation Sdn Bhd for
policy, potential investors & Sabah registered 6,983 transactions with a biotechnology hub development in
businesses encouraged to set- a total value of RM3.51 billion, a decrease Kota Kinabalu Industrial Park (KKIP). The
up manufacturing facilities in of approximately 11% and 9% in volume proposed development is positioned on
proposed Sepanggar Free Zone. and value respectively when measured a 30-acre land at the Commercial Zone
against year 2015. However, the figures 1 Phase 2 within the park with possible
registered for 1Q2017 have shown sign expansion of another 100 acres.
High rise residential units make of improvement for the Sabah property
up 34% of total residential stock. Hap Seng, together with its Credit
market as a whole.
Division, has introduced its new 100%
According to NAPIC, Sabah registered margin of finance scheme to assist buyers
Retail sector will continue to face 1,762 transactions with a total value who intend to purchase homes developed
challenges as supply increases. of RM774.07 million in 1Q2017. The by the company.
volume of transactions have surged by
circa 11% as compared to the preceding
quarter (1Q2016). Conversely, the value
of transactions have dropped slightly by
circa 5% as compared to RM820 million
recorded in 1Q2016.
Statistics from SHAREDA revealed that
the estimated total gross development
value (GDV) for year 2016 has increased
Pearl D’costa Resort @Waterfront
by circa 10% from RM2.669 billion in
2015 to RM2.940 billion. This shows that Pearl D’costa Resorts @Waterfront, a
there is still appetite for Sabah property joint-venture (JV) development between
market from the developers’ perspective, Yayasan Sabah and Leadmont Land
despite the economic turbulence and (Sabah) Sdn Bhd, is poised to be the new
political uncertainties. tourism hub for Sabah. The proposed
development will be strategically located
Market Highlights in front of the renowned waterfront
With the abolishment of the cabotage esplanade – Kota Kinabalu Waterfront.
policy for Sabah, Sarawak and Labuan Pearl D’Costa will comprise of a
effective 1st June 2017, potential single-storey retail and marine walk; a
investors and businesses are encouraged 20-storey serviced apartments, a 4-storey
to set up manufacturing facilities in the conventional car park, a 6-star hotel lobby
proposed Sepanggar Free Zone (SFZ) and lounge, rooftop infinity pool and roof
and domestic hub of Sepanggar Bay garden.
Container Port (SBCP). The SBCP is in
The launching ceremony of Sky City
the midst of securing the involvement of
between Homesign Network Sdn Bhd
Main-Line Operators (MLOs) to enhance
and MCC Sdn Bhd was officiated on 6th
global connectivity. Positioned in a
December 2016. Sky City is an integrated
strategic geographic location to serve as
and self-contained development that will
a transhipment point for north- and south-
feature two towers of 28-storey luxury
bound container ships along the major
residential suites, a lifestyle mall, Grade
shipping lines of the Far Eastern and
A office and a 5-star hotel. As a JV with
South Pacific regions, SBCP shall also
the Ministry of Local Government and
be developed to serve as a transhipment
Housing Sabah (KKTP) Sdn Bhd, this is
hub, linking the rapidly growing BIMP-
a revival and rescue project of a former
EAGA (Brunei-Indonesia-Malaysia-
development called “Taman Hartawan”.
Philippines East ASEAN Growth Area) and
the Northeast Asian Economies, which Titijaya Land Bhd and CREC
serves as the global port of entry to the Development (M) Sdn Bhd (CRECD) have
19You can also read
