Malaysia Real Estate Report Q4 2011
Business Monitor International, September 2011, Pages: 56
Business Monitor International's Malaysia Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Malaysia's Real Estate industry.
The Malaysian economy is forecast to slow from the strong growth in 2010 of 7.2% to a more moderate 4.9% in 2011 and 4.2% in 2012. The growth is forecast to be driven largely by domestic consumption and investment. While the government has been cautious on fiscal spend in 2010 BMI is forecasting the government to increase spending in 2011 underpinning our growth projections. Against this backdrop the real estate sector in Malaysia is forecast to be relatively firm, the main hindrance being new supply particularly in the commercial property sector. When we spoke to them in mid-2011, our in-country sources were reasonably upbeat.
The commercial office space supply increased further in 2011. As a result the vacancy levels in Kuala Lumpur are 10-15% constraining the outlook for rental rate increases. Rents, absorption and occupancy rates are expected to track sideways, as supply and vacancy rates increase. Office rental levels are expected to hold up better in Johor Bahru and Kota Kinabalu.
In the retail subsector, the signs are fairly positive and the industry is expected to grow by around 6% in 2011. Spending by consumers is growing – disposable income levels are rising, the unemployment rate is low (around 3.0%), and tourism is on the increase.
In the industrial subsector, there is growing demand for space from small and medium enterprises (SMEs), leading to increased developments for this segment. Increasing industrial property developments will occur in new areas, both within and outside the Greater Kuala Lumpur area. It is anticipated the automotive, oil and gas, electrical and logistics sectors will be drivers of demand for space in the industrial sector.
A big driver for growth in the construction sector in Malaysia 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. To date, 46 projects with an investment value of MYR95bn have been confirmed. MYR36.6bn of this is for investment in the Mass Rapid transport programme and MYR28bn (30%) is investment in the Oil, Gas and Energy sector. 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 Program –which aims to provide affordable homes to moderate-income households – is also an opportunity for the real estate sector.
As far as we can see, there are two main risks. One is a possible (but not likely) significant slowdown in the economy. The other is of misallocation of funds (through the construction of uneconomic ‘white elephants’ in an industry which is dominated by the government and government-linked corporations.
Executive Summary
SWOT Analysis
Malaysia Real Estate/Construction SWOT
Malaysia Economic SWOT
Malaysia Business Environment SWOT
Real Estate Market Overview
Real Estate Market Analysis
Table: Malaysia’s Real Estate Markets – Rentals, 2010 And 2011 (m²/month, MYR)
Table: Malaysia’s Real Estate Market – Net Yield, 2011 And 2012 (%)
Table: Malaysia’s Real Estate Market – Terms Of Contract/Lease
Table: Malaysia’s Real Estate Market – Available And Vacant Space (m²)
Industry Forecast Scenario
Table: Malaysia’s Real Estate Market – Rentals, 2010-2012 (m²/month, MYR)
Table: Malaysia’s Real Estate Market – Forecast Net Yield, 2008-2015 (%)
Construction Industry Outlook
Table: Malaysia Construction And Infrastructure Industry Data, 2007-2015
Table: Malaysia Construction And Infrastructure Industry Data, 2012-2020
Construction And Infrastructure Forecast Scenario
Macroeconomic Outlook
Table: Malaysia – Economic Activity, 2008-2015
Business Environment
Real Estate/Construction Business Environment Ratings
Table: Asia Real Estate/Construction Business Environment Ratings
Malaysia’s RECBER
Malaysia’s Business Environment
Table: BMI Business And Operation Risk Ratings
Table: BMI Legal Framework Rating
Table: Labour Force Quality
Table: Asia, Annual FDI Inflows, 2006-2008
Table: Trade And Investment Ratings
Table: Top Export Destinations (US$mn), 2002-2009
Competitive Landscape
Company Profiles
AZRB
General Corporation Berhad
IJM Corporation Berhad
Isyoda Corporation Berhad (ICB)
MRCB
WCT Berhad
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Real Estate/Construction Business Environment Rating
Table: Weighting Of Indicators
Project Finance Ratings Indicators
Table: Design And Construction Phase
Table: Commissioning And Operating Phase – Commercial Construction
Table: Commissioning And Operating Phase – Energy And Utilities
Table: Commissioning And Operating Phase – Transport
Sources
- AZRB
- General Corporation Berhad
- IJM Corporation Berhad
- Isyoda Corporation Berhad (ICB)
- MRCB
- WCT Berhad
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