Property players upbeat, credit resilient M’sia economy
PROPERTY developers are general optimistic on the property market outlook for 2013, as Malaysia targets a five per cent growth in gross domestic product (GDP) despite weak exports.
Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz has reiterated her optimism that the economy will continue to do well in 2013 despite challenges in the global economy.
The GDP growth target of five per cent will be made possible by the resilience displayed by the domestic economy, fuelled by local private investments.
Mah Sing Group Bhd group Managing Director Tan Sri Leong Hoy Kum is certain that the overall property industry will do better next year as it is highly dependent on the domestic market.
“As long as the properties have good concepts, are in the right location, and they cater to market demand, it will do well. We are supported by young demographics which continue to form new households, high savings rate and low unemployment rate.
“As long as income remains intact and properties remain affordable, the local property market should continue to remain resilient and serve as a hedge against inflation,” Leong told Business Times.
He expects the residential market to continue being the main driver for property sales next year, similar to previous years’ trends.
Leong said developers will also be focusing on landed residential projects and niche size high-rise projects, which amounts to 77 per cent of the group’s RM3 billion sales target for 2013. In the commercial segment, he said retail offices in good schemes, smaller SoHo (small office/home office) and SoVo (small office/versatile office) properties would also do well due to the affordable price points and lack of supply in selected locations, especially in integrated development projects.
“We are also confident about mass market housing for the middle-income class where there is a pent-up demand for basic shelter,” Leong said.
Meanwhile, Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng expects the office sub-sector to remain challenging as a result of oversupply situation and stiff competition.
He said rentals are expected to remain stagnant or on a declining trend.
On demand side, it will be driven by relocation of tenants from older office buildings to newer towers with better specifications.
Ng also expects more competition in the hospitality sector with the incoming supply of five-star hotels such as St Regis and Banyan Tree.
“More supply equates to more competitive environment. Under such circumstances, it is the survival of the fittest where hotel operators with strong brandname and track records will have competitive advantage over other hotel operators,” he said.
Following the announcement of Budget 2013, Malaysia’s property market remains healthy and several locations are set to experience solid demand, said Gavin Tee, Founder and President of SwhengTee International Real Estate Investors Club.
“The outlook for property investors in 2013 is still positive especially with selected locations poised to experience rapid growth.”
Tee pointed out that most demand is seen across tourism-related real estate such as those found in Penang, Langkawi, Melaka, Sarawak, Sabah and Johor Bahru. In addition, interest on globalised properties – like Penang, Iskandar, KLCC and Bukit Bintang – is also healthy. Moreover, national projects will also significantly boost demand in key areas. These projects include the Eastern, Northern and Southern (Medini, Nusajaya) corridors; as well as projects in the Greater Kuala Lumpur area such as the MRT project, the Tun Razak Exchange (TRX), Menara Warisan and Cyberjaya.
The projects will continue to attract investors into these areas. However, growth in such locations will be determined by the upcoming infrastructural projects surrounding the mega developments.
Primeland Estate Agency will be launching two properties in Malaysia, The Verdana in Kuala Lumpur and the Strait View in Iskandar, at the Empire Hotel & Country Club on Saturday, January 19 and Sunday, January 20, from 10.30am to 7.30pm. For details, please call 2424738/39/40 or visit our office in Kg Mata Mata Gadong.