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Industrial activities to see increasing capital inflows from Chinese investments

08 February 2018

 

Township developments expected around major ports in Malaysia

7 February 2018, MalaysiaKnight Frank Malaysia launches the new report Chinese Corridors in Malaysia在马中资which assesses the investment opportunities that are arising in Malaysia, equipping investors with insights for real estate investment decisions. 

Looking into 2018 and beyond, Knight Frank Malaysia expects to see greater capital inflow from China’s Belt & Road Initiative (BRI) into Malaysia. The country’s rail and port projects continue to attract Chinese government-linked investors, whilst developers and investors seek opportunities into real estate, particularly in industrial driven township developments. 

Sarkunan Subramaniam, Managing Director of Knight Frank Malaysia says, “China’s BRI is the catalyst that will turn the balance of power towards the east. Its BRI policy comes at a time that many of its neighbours need China’s capital to boost their economy. Whilst the capital controls will slow China’s private capital investments in the BRI, the State-owned companies continue their plan to invest in Port and Rail infrastructure to ensure ‘all roads now lead to China’. Malaysia’s strategic location in the BRI can propel the country as a key regional ally to China’s initiative, reaping economic benefits in the process.” 

Looking at the hotspots in Malaysia, Allan Sim, Executive Director of Capital Markets, Knight Frank Malaysia says, “Industrial and mixed-use assets in Malaysia will be buoyed by the rising interests from Chinese investors into the manufacturing sector where Chinese manufacturers are expected to set up production facilities here. 

“Similarly, the industrial sector will also benefit from China playing a pivotal role in developing Malaysia’s digital economy, alongside the rapid development in Malaysia’s logistics and warehousing sectors. 

“And in the longer term, we can also expect a flow-on effect to business activities, creating a demand for hospitality related services.” 

Nicholas Holt, Head of Research, Knight Frank Asia Pacific, says, With Beijing’s tightening of regulations leading to slower inflow of Chinese capital, we now see more developers from China making inroads into the local development scene via joint-venture arrangements where there is less strain on capital flow rather than outright purchase of land.” 

Highlights of Chinese investments and interests in Malaysia:

  • According to Malaysia Investment Development Authority (MIDA), China invested a total of RM4.77 billion in 33 Malaysian manufacturing projects and became the main source of foreign direct investment into Malaysia in 2016. 
  • The appointment of Jack Ma, founder of China’s Alibaba Group, as Malaysia’s digital economy adviser, leading to the formation of the KLIA Aeropolis Digital Free Trade Zone (DFTZ) Park in Sepang, Selangor is expected to put Malaysia on the global logistics map. 
  • In the real estate segment, Malaysia continues to attract Chinese investors looking at good investment value balancing between quality and costs. Chinese participation comes in the form of investors, developers and construction companies. 
  • Pull factors attracting Chinese interests to Malaysia include:
    • The Belt and Road Initiative;
    • Strong bilateral relations between the two countries;
    • Tightening of China’s housing policies and its moderating economy;
    • Malaysia’s strategic position within the Asia Pacific and ASEAN region; and
    • A stable government, good growth potential, investor friendly guidelines and lower entry cost for property development. 

 

END 

 

To download the report, please click: http://bit.ly/2BYWOfb    

For further information, please contact: 

Ms Seline Soo, Marketing & Communications Manager, Knight Frank Malaysia

seline.soo@my.knightfrank.com +603 2289 9669 @KnightFrank_my

 

Ms Valerie Cheok, Marketing Executive, Knight Frank Malaysia

valerie.cheok@my.knightfrank.com +603 2289 9667 @KnightFrank_my 

Notes to Editors

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 15,000 people operating from 418 offices across 60 markets. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit knightfrank.com. 

Knight Frank has a strong presence in Malaysia with its headquarters in Kuala Lumpur as well as branches in Penang, Johor and Kota Kinabalu. The company offers high-quality professional advice and solutions across a comprehensive portfolio of property services and is registered with the Board of Valuers, Appraisers and Estate Agents. The Company is licensed to undertake property, valuations / consultancy, estate agency and property management and is also on the panel of all leading banks and financial institutions. For further information about the Company, please visit www.knightfrank.com.my.