Real estate firm Knight Frank Malaysia, in its latest Malaysia Real Estate Highlights report for first six months of 2016, noted how infrastructure is acting as a major boost for the property and real estate sector in the country.
The report looked into the market performance across the various property sectors – residential, office and retail; and highlighted trends and outlook in the four key markets in Malaysia, including Kuala Lumpur, Klang Valley, Penang, Johor Bahru and Kota Kinabalu.
Sarkunan Subramaniam, Managing Director, Knight Frank Malaysia, said, “Despite the cloudy outlook for all market sectors amid further weakening in the domestic economy and global uncertainties, the construction industry, particularly infrastructure-related, continues to drive economic growth.
“The recent signing of the Memorandum of Understanding (MoU) between the Governments of Malaysia and Singapore on the High-Speed Rail (HSR) linking Kuala Lumpur and Singapore is welcome news, bringing the game-changer project a step closer to reality.
“With the first phase of the Sungai Buloh-Kajang (SBK) MRT Line slated to be operational by the end of this year, urbanites in Klang Valley will experience improved mobility.
“The slew of infrastructure-related projects in the country will inevitably shift the focus of future developments, with more activities expected along the various transportation routes as a higher segment of the population embraces public transit ridership encouraged by reduced travelling time.”
Highlights of 1H 2016
Kuala Lumpur High-end Condominium Market
The residential market remained lackluster, according to Knight Frank, with lower volumes witnessed. Property developers adopted innovative ‘push marketing’.
Kuala Lumpur and Beyond Kuala Lumpur (Selangor) Office Markets
MNCs from marine an offshore sectors were being enticed to relocate to Kuala Lumpur in view of attractive currency and competitive rental rates.
Klang Valley Retail Market
Consumers continued to hold back on spending, evident from weaker retail sales data in 1Q 2016 (down 4.4 percent) against 1.3 percent growth in 4Q 2015. Opportunities remained despite overall negativity, particularly in selected and upcoming under-served but well populated areas.
Penang
The RM 337 million Bayan Lepas Expressway was opened in early April 2016. The highway, capable of accommodating a traffic volumes of 70,000 vehicles per day is part of the traffic dispersal initiative in the area and is expected to ease traffic congestion between Batu Maung and Sungai Nibong.
Johor Bahru
Iskandar remained attractive to investors, with cumulative investments now standing at RM 202 billion since 2006.
Kota Kinabalu
Sabah looks set to benefit from long -term big infrastructure projects, such as the Pan Borneo Highway and Bus Rapid Transport system.
The full Knight Frank research report is available for download here.
