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Knight Frank launches 2nd Edition of Malaysia Commercial Real Estate Investment Sentiment Survey

26 February 2016

Knight Frank launches 2nd Edition of Malaysia Commercial Real Estate Investment Sentiment Survey

 

23 February 2016, Malaysia – Knight Frank Malaysia, the global property consultancy, launches the Malaysia Commercial Real Estate Investment Sentiment Survey (CREISS) 2016.. The survey takes a litmus test of insights and preferences of key players, namely fund managers, developers and lenders in the commercial sector for the year 2016. 

Survey Respondents

The survey was conducted using an e-survey mechanism distributed throughout Knight Frank’s vast database as well as in-depth interviews with key players in the local commercial sector.

There were some 700 respondents in Senior Management levels this year, consisting of:

• 55% : Developers

• 21% : Fund/REIT Manager

• 24% : Lender

 

Key Highlights for 2015

2015 – PERFORMANCE

• 54% : As Expected

• 46% : Below Expectations 

2015 – FAVOURABLE & UNFAVOURABLE FACTORS AFFECTING COMMERCIAL REAL ESTATE SENTIMENT INVESTMENT

• Negative factors outweigh the positive in 2015

• Three (3) favourable factors ranked highest

- Ongoing MRT & Infrastructure

- Availability of good stock/Investment opportunities

- Availability of fund

• Negative factors

- Country’s political scene

- GST

- Slowing economy

- Cooling measures

- Ringgit Depreciation

2015 – SUBSECTORS INVESTED/LOANED/DEVELOPED

• 65% : Office and Retail

• 30% : Hotel / Leisure

• 29% : Logistics / Industrial

• 22% : Retail 

Key findings for 2016

THE OUTLOOK (OVERALL)

• 63% : Less Optimistic

• 18% : No Change

• 19% : More Optimistic

THE INVESTMENT OUTLOOK

• 57% : Less Optimistic

• 13% : No Change

• 30% : More Optimistic 

COMMERCIAL SUB SECTORS INVESTMENT

• 72% : YES

• 28% : NO

​Sub-sectors:

• 39% : Retail

• 34% : Healthcare / Institutional

• 31% : Office

• 30% : Logistic / Industrial

• 29% : Hotel / Leisure 

INVESTMENT BY INDUSTRY PLAYERS

Fund / REIT Managers

• 53% : Office

• 47% : Retail & Healthcare / Institutional 

EXPECTED PERFORMANCE BY SUB-SECTORS

OVERALL

• 36% : Healthcare / Institutional to outperform

• 12% : Office and Retail – outlook less optimistic

CAPITAL VALUE

• 51% to 63% : Expects capital values to remain unchanged

• 40% : Healthcare / Institutional related properties to INCREASE

• 31% : Retail to DECLINE

• 28% : Office to DECLINE 

RENTAL VALUE

• 52% : Expects office rental to DECLINE

• 41% : Expects retail rental to DECLINE

• 16% : Expects rentals for Logistics / Industrial to INCREASE

• 47% : Expects ARR for Hotels to STAGNATE (1) 

(1) DBKL Freeze all Development Orders for Hotel development in KL until further notice due to oversupply – 22 Feb 2016

OCCUPANCY RATE

• 55% : Expects office occupancy to DECLINE

• 48% : Expects retail occupancy to DECLINE

YIELD PERFORMANCE

• 42% : Expects office yield to COMPRESS

• 37% : Expects retail yield to COMPRESS

• 34% : Expects yield for Healthcare / Institutional to INCREASE

 

WHERE TO INVEST?

• 67% : Penang - most attractive

• 56% : KL Fringe / Klang Valley

• 55% : Johor – Iskandar Malaysia

• 49% : KL CBD (Golden Triangle)

• 45% : KK

KL was the top investment choice in 2015 – now in Fourth position

FAVOURABLE & UNFAVOURABLE FACTORS AFFECTING CREISS IN 2016

• Three (3) favourable factors ranked highest

- On-going MRT & Infrastructure

- Availability of good stock/Investment opportunities

- Availability of Capital / Fund 

• Negative factors

- Country’s political scene 

END

To download the report, please visit: http://bit.ly/1WFzhUK