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Malaysia Real Estate Highlights 1H2015

21 September 2015

  Knight Frank Malaysia Real Estate Highlights 1H2015

Key highlights and outlook of the Malaysian property market

05 August 2015, Malaysia – Knight Frank Malaysia launches the Malaysia Real Estate Highlights for 1H2015.  The report looks into the market performance across the various property mix – Residential, Office, Retail and Industry; and highlights the trends and outlook in the four key markets in Malaysia, including Kuala Lumpur / Klang Valley, Penang, Johor Bahru and Kota Kinabalu.

Market Indications

  • The Malaysian economy maintained its growth momentum by expanding 5.6% in the first quarter of 2015 (4Q2014: 5.7%), supported by private sector expenditure.

  • The country achieved its growth target of 6.0% in 2014 (2013: 4.7%). The labour market conditions were weaker with unemployment rate recorded at 3.1% in 1Q2015 (2014: 2.9%).

  • Bank Negara Malaysia kept the Overnight Policy Rate (OPR) unchanged at 3.25% at its recent Monetary Policy Committee (MPC) meeting in May in an effort to support economic growth and domestic consumption.

Sarkunan Subramaniam, Managing Director, Knight Frank Malaysia says, “The real estate investment market is subdued due to the current economic uncertainties with the ringgit at a 16 year low, China’s stock market downturn, Greek crisis, rising costs of living and the Malaysian political debacle. All these have had a collective contagion effect on sentiments and people are cautious.

Effective demand for residential is squeezed by lack of bank financing whilst commercial investment is diluted by impending supply. However, the fundamentals are solid where demand for good quality residences for owner occupation and investment are strong, provided pricing is seen to be discounted to previous highs and the developer has good reputation. Occupational demand for quality offices are also good with multinationals rationalizing their footprint and moving to better space albeit at competitive rents.

For the market to take a quantum leap from the current direction, some good change in the local scene is required to return investor confidence to the economy.”

Highlights for 1H2015  

Residential

·         Softening demand in the high end condominium segment amid a cautious market.

·         Developers with niche high end residential projects in KL City review products, pricing and marketing strategies in a challenging market with lacklustre demand, impacted by a general slowdown in the economy, tight lending guidelines, weaker job market amongst other reasons.

Office

·                   Tenant-favoured office market continued to remain resilient amid high supply pipeline.

·                   Real estate investment opportunities abound despite challenging market.

·                   New benchmark price in KL office space.

Retail

·       The local retail industry is expected to grow at a slower pace amid dampened consumer sentiment due to rising cost of living and a slowing economy.

·       Despite the subdued market, the retail sector continues to witness the entry of new international brands as well as the expansion of existing brands and outlets, especially at prime shopping centres in Klang Valley. 

Market Outlook

·           In the short to medium term, KL City high-end condominium market outlook is one of caution with lower sales volume and modest / limited price growth anticipated.

·           Office market outlook is cautious with lower net absorption as plans for expansion and relocation are put on hold.

·           Moving forward, the Klang Valley retail market will face further dilution with the scheduled completion of 13 new shopping malls by 2H2015 / early 2016.

 

END

To download the report, please visit: http://bit.ly/1Dm6hwW

For further information, please contact:

Ms Judy Ong, Executive Director, Research and Consultancy, Knight Frank Malaysia

judy.ong@my.knightfrank.com +603 2289 9663

Ms Pamela Phua, Asst. Marketing & Communications Manager, Knight Frank Malaysia

pamela.phua@my.knightfrank.com +603 2289 9669 @KnightFrank_my

Notes to Editors

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Grubb Knight Frank, operate from 335 offices, in 52 countries, across six continents.  More than 12,000 professionals handle in excess of US$1 trillion (£643 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants.  For further information about the Company, please visit www.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.