Earlier this year, Knight Frank published a survey on Malaysia’s commercial real estate investment sentiment. The survey targeted some 700 respondents in the senior management levels across the property industry and the respondents consists of players in the commercial real estate; 55% were developers, 24% commercial lenders and 21% fund/REIT managers. Hence, the purpose of this article is to highlight some of the key findings from the survey.
Despite the challenging environment in 2016 and negative speculations on their projections of the future in property market, the survey highlights that savvy investors see opportunities in the property market. Additionally, the high slew of high impact infrastructure and investment projects (on-going and proposed) is in fact positive for medium-term property growth.
“High impact infrastructure and investment projects (on-going and proposed) is positive for medium-term property growth”
To highlight, below are some of the key findings of Knight Frank’s report:
- Healthcare/ institutional, hotel/ leisure and logistics/ industrial sectors are expected to be more resilient due to sustained demand in the healthcare and education industries and tight supply in the logistics/ industrial segment
- The e-commerce business trend has led to demand for logistics warehouses
- 72% of the respondents intend to invest in one or more commercial sub-sectors in 2016
- Fund/ REIT managers are expected to be actively investing in 2016; seeking opportunities in a slow property market
- 53% indicated their intention to invest in the office segment and, 47% in the retail and healthcare/ institutional sub-sectors. This is provided yield expectations are met
Region for Commercial Property Investment in 2016
To add, the report has also included a regional outlook on Malaysia’s commercial property investment. It is reported that Penang has overtaken Kuala Lumpur / Klang Valley as the most attractive region for investment, garnering 67% of the overall responses. KL CBD (Golden Triangle) which was the top investment choice in 2015 has retreated in the ranking to fourth position with 49% of responses after KL Fringe/ Klang Valley (56%) and Johor/ Iskandar (55%).
The healthcare/ institutional segment is the most attractive sub-sector for investment, garnering 69% of responses, followed by the hotel/ leisure segment (65%), logistics/ industrial (52%) and retail (50%).
Penang is currently the most attractive investment region for hotel/ leisure (86%) and healthcare/ institutional (79%) developments possibly due to George Town being inscribed as one of UNESCO’s World Heritage Sites and the popularity of the state for medical tourism.
Source: Knight Frank – Malaysia commercial real estate investment sentiment survey 2016