KUALA LUMPUR: Malaysia’s property market is showing signs of bottoming out, with “rays of hope” in the housing market, according to Knight Frank Malaysia in its latest research report, “Real Estate Highlights 1st Half of 2019”.
Knight Frank Malaysia managing director Sarkunan Subramaniam said Malaysia’s property market is poised to gather further momentum moving into the second half of 2019 as the market is “firing various cylinders”.
In the residential segment, the extended National Home Ownership Campaign (HOC) will continue to stir interest among home buyers while providing an opportunity for developers to clear existing stock.
The first half of the year also saw the launches of a few high-end condominium/serviced apartment projects on pockets of land in Kuala Lumpur city.
As for the retail sector, while consumer sentiments remain subdued, retail sales remain in the expansionary territory. Operators of existing shopping malls need to continuously review their trade and tenant mix to ensure that they remain attractive and cater to consumers within their trade areas, while retailers must innovate and refresh their stores by embracing technology for improved in-store experiences in the diluted retail market.
In the residential market, Sarkunan said many developers are participating in the HOC as it presents a good opportunity for them to clear their existing inventories and is positive for the residential market.
“We may finally be seeing rays of hope in the housing market. The HOC 2019 campaign, which has been extended until Dec 31, 2019, is expected to provide further traction to the housing market, including the high-end condominium/serviced apartment segment.”
In the commercial market, looming supply and weak absorption continue to impact the Klang Valley office market although rental and occupancy levels are seen to be holding firm in KL Fringe and Selangor. The availability of good grade office supply at competitive rentals and the expanding public rail transit lines have boosted the popularity of decentralised office locations.
Knight Frank Malaysia executive director of valuation & advisory Keith Ooi said in this tenant-led office market, landlords need to be realistic on their rental expectations although the growing co-working/shared services segment provides a small window of opportunity for letting.
“Retail sales growth have improved although consumers remain prudent in their spending amid rising cost of living and slower income growth. Mall operators are allocating a higher percentage of their leasable space for experiential retail purpose while more retailers are integrating their digital and brick-and-mortar outlets in line with rapid changes in the retail trends and consumer behaviour.
“Despite heightened competition in the retail market, prime malls continue to enjoy high occupancies with most garnering single-digit growth in terms of rental reversion.”
While challenges remain in selected market segments where mismatch between supply and demand continues to widen, the report said, the overall property market was sustained with slight uptick in activities.
In the Klang Valley, Knight Frank Malaysia executive director of capital markets Allan Sim said, with semiconductors and E&E players looking to expand within Malaysia, it anticipates more construction activities of factories and warehouses to cater to the relocation and expansion of these foreign manufacturers.
“Another exciting chapter to watch out for is the e-commerce logistics warehousing sector. The 1.2 million sq ft air logistics hub within the Digital Free Trade Zone is slated for completion by end of this year and we expect to see further activities in the e-commerce warehousing and logistics market.”