Malaysia Real Estate Industry Update Quarter 1 2012

  • December 2013
  • -
  • Business Monitor International
  • -
  • 77 pages

There seems to be a subdued optimism in Malaysia’s real estate segment at present, reflecting BMI’s projection moderation in Gross Domestic Product growth to 4.8%, from the strong showing of 7.2% in 2010. Our current projections for the real estate segment are relatively firm, the main hindrance being a lack of new supply in the commercial property segment . When we spoke to them in mid-2011, our in-country sources were reasonably upbeat.
A big driver for growth in construction is the government’s Economic Transformation Programme (ETP), launched in December 2010. The government identified 131 projects with a total investment value of MYR794.5bn. Exactly 46 projects, with an investment value of MYR95bn have been confirmed.
MYR36.6bn of this is for investment in the Mass Rapid Transport (MRT) programme and MYR28bn (30%) is for investment in the oil, gas and energy segment . Investment in tourism includes the development of the MYR600mn Marina Island Pangkor 2nd International Resort and Entertainment Island, which includes waterfront property development. The new 1Malaysia Housing Programme – which aims to provide affordable homes to moderate-income households – is also an opportunity for corresponding commercial developments to grow.
Key Opportunities In The Real Estate Segment :
- It is hoped that overseas investors will be targeting Malaysia in the coming months. Industries like Malaysia are appealing to Middle Eastern industry players aiming to avoid the US and eurozone amid debt fears. The country is also industry ing its potential to Chinese investors.
- Infrastructure plans formed by the ETP will boost the profile of a number of local industry players involved in their development. These are also serving to increase investor perception of Kuala Lumpur and its surrounding area in particular.
- In the wake of the global financial crisis, Malaysia remains one of the most stable industry s in the region.
Key Risks To The Real Estate Segment :
- Moderation of growth in the economy could cause a slowdown in investment, while industry players wait for conditions to improve at a better rate.
- A number of Malaysian property developers are looking overseas, following rising domestic land costs that hamper their ability to find new development opportunities.
- A large proportion (20%) of Kuala Lumpur’s office space is vacant, suggesting a dearth of new property in recent years has not been matched by demand. This will prevent developers from creating new projects until existing supply is taken up.

Table Of Contents

Executive Summary . 5
Industry SWOT Analysis 7
Malaysia Real Estate/Construction SWOT .. 7
Malaysia Economic Environment and Risk Analysis .. 8
Malaysia Business Environment SWOT . 9
Real Estate Industry Overview 10
Real Estate Industry Analysis . 12
Data : Malaysia’s Real Estate Industries - Rentals, 2010 And 2011 (m²/month, MYR) .. 13
Data : Malaysia’s Real Estate Industry - Net Yield, 2011 And 2012 (%) .. 14
Data : Malaysia’s Real Estate Industry - Terms Of Contract/Lease 14
Data : Malaysia’s Real Estate Industry - Available And Vacant Space (m²) 15

Industry Projection Scenario 16
Data : Malaysia’s Real Estate Industry - Rentals, from 2010 to 2012 (m²/month, MYR) .. 17
Data : Malaysia’s Real Estate Industry - Projection Net Yield, from 2008 to 2016 (%) 18
Construction Market Outlook . 19
Data : Malaysia Construction And Infrastructure Market Data 19
Construction And Infrastructure Projection Scenario . 20

Macroeconomic Data . 22
Malaysia - Economic Activity .. 24

Environment Overview 25
Real Estate/Construction Business Environment Ratings .. 25
Data : Real Estate Business Environment Ratings . 25
Malaysia’s Business Environment . 26
Data : BMI Business And Operation Risk Ratings . 26
Institutions . 27
Data : BMI Legal Framework Rating .. 28
Infrastructure 30
Data : Labour Force Quality 32
Market Orientation 32
Data : Asia, Annual Fdi Inflows . 35
Data : Trade And Investment Ratings .. 36
Data : Top Export Destinations (US$mn) .. 37
Operational Risk . 37

Competition Overview .. 39
Company Profiles 40
AZRB 40
General Corporation Berhad 41
IJM Corporation Berhad 42
Isyoda Corporation Berhad (ICB) . 43
MRCB .. 44
WCT Berhad . 45
BMI Methodology 46
How We Generate Our Market Projections 46
Construction Market .. 47
Bank Lending 48
Real Estate/Construction Business Environment Rating . 48
Data : Weighting Of Indicators .. 49
Sources 51

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