The Malaysian property market generally performed to form this year, with activities registered especially in the office and high-end residential subsectors. Strong buying interest came from foreign purchasers and this was translated into credible take-up besides chasing up values to new benchmarks.
Besides capital values, occupancies and rentals in quality office space also improved. Knight Frank Malaysia managing director Eric Ooi is confident that demand for good quality office space and high-end condominiums will extend to 2008.
With prices soaring beyond the RM2,000 psf mark for luxurious condos in the KLCC area, Ooi expects yield compression for high-end condos with several projects completing in 2008, such as The Meritz, Avare, K Residence, Park Seven, Suria Stonor and Pavilion Residences.
Incentives and measures, such as the waiver of the Real Property Gains Tax and the relaxation of the Foreign Investment Committee ruling, helped boost sales while increased effort to promote the Malaysia My Second Home Programme by the government created greater interest in the local market.
The list of property hot spots in bustling Klang Valley includes the KLCC vicinity, KL Sentral, Damansara Heights Town Centre and Kota Damansara.
Numerous major real estate transactions took place this year, such as the forward purchase of The Icon KL at RM900 psf and Glomac Tower (estimated to be higher than RM1,000 psf). These buildings were sold off the plan and are of higher value due to their better specifications and prime locations.
Another noteworthy deal was the sale of prime commercial plots in KL Sentral. Ooi says this signifies the coming of age of KL Sentral as a significant and prime commercial location. Then there was the sale of KL Plaza located on Jalan Bukit Bintang.
Prime office properties are expected to continue to command strong interest in KLCC, KL Sentral and Damansara Heights. Prices and rentals will climb higher and reach new benchmarks while more property transactions are expected in 2008, with foreign funds and real estate investment funds looking to invest in quality projects, offers Ooi. Malaysia, he adds, is attracting more foreign direct investments now as investors' interest has shifted from Thailand and Indonesia to Malaysia.
It is interesting to note that the World Investment Prospects Survey 2007-2009 FDI conducted by the United Nations Conference on Trade and Development (Unctad) mentioned that Malaysia is in the top 20 favourite FDI destinations.
According to Ooi, the new economic regions, such as the Iskandar Development Region in Johor, are also attracting FDI, especially from the Middle East, while the international halal park to be built in Selangor is expected to attract RM1.7 billion of FDI.
The year 2007 was also exciting for both retailers and shoppers with the opening of several lifestyle shopping centres, such as The Gardens and Pavilion KL, which brought in new retail brands and created more choices for shoppers, adds Ooi. - By The Edge Daily
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