Amidst the uncertainty over the strength of the global economic recovery in 2014 and rising cost, Malaysia is still a bright spot for business within ASEAN. Driven by stronger domestic demand and a recovery in exports, the Malaysian economy grew by 5.0% in Q3, outpacing the Q2 growth of 4.4%.
Investment activity remained steady, but with the recent announcement of an increase in Real Property Gains Tax (RPGT), and a pending imposition of a Goods and Services Tax (GST) of 6% in April 2015, sentiment is expected to be impacted in the short term across the property sectors.
The overall office market demand remained stable throughout 2013 with average rental rates and capital values remaining unchanged despite substantial supply. The market will continue to see challenges ahead as it is not certain if projected future demand is able to absorb the significant office supply in the pipeline.
Prime malls in urban and suburban locations continued to enjoy robust occupancy of above 95%, in spite of weakening consumer confidence in view of the rising cost of living and lower purchasing power of Malaysian households.
A substantial supply of 3,971 units of high-end condominiums were completed throughout 2013, a four-fold increase on the 748 units recorded in 2012. Average capital values were relatively strong and registered an increase of 2.0% quarter-on-quarter (q-o-q) and 11.3% year-on-year (y-o-y) in Q4. However, the rental value declined 1.0% q-o-q and 2.5% y-o-y in Q4. The number of completions in 2014 is likely to be the highest level recorded since 2005. This is expected to exert further downward pressure on rental values, especially in the city centre and it remains to be seen if capital values will be affected if speculative investors were to offload their units when they are completed.
Source : DTZ (Groupe UGL)