Sabah among top investment choices
Published on: Wednesday, February 22, 2017
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Kuala Lumpur: Property investors continue to be positive on commercial opportunities in Malaysia despite the country's slower economic growth, according to a poll by Knight Frank Malaysia.According to the property consultant's third Malaysia Commercial Real Estate Investment Sentiment Survey (CREISS) 2017, investors are now casting their sights beyond the Klang Valley and towards Johor, Penang and Sabah.

Respondents noted that the supply of commercial property in the Klang Valley continued to exceed demand, and would continue to apply pressure on occupancy rates and rental yields.

Despite the apparent glut, over half of the developers polled said the intend to continue investment in the retail and office sectors this year.

The survey also concluded that the leisure and hotel subsectors will generate the most interest this year, followed by the logistics and industrial subsectors.

"Despite the challenging operating environment, the respondents have expressed their interest in exploring investment opportunities in various regions.

"Sabah and Penang were voted as the highly attractive regions for hotel / leisure investment, likely attributed to their strong tourism market," Sarkunan Subramaniam, managing director of the firm said in a statement.

Interest in investing in the hotel and leisure sectors jumped from 65 per cent last year to 93 per cent in 2017.

Sabah and Penang were selected by respondents as the most viable locations for both forms of investments, driven largely by their existing popularity with tourists. Kuala Lumpur remained, however, the most popular property investment destination.

The survey pointed that favourable factors such as the ongoing Mass Rapid Transit (MRT) and other infrastructure developments were among the factors that will drive the market further.

On rental yields for offices and industrial sectors, it said 70 per cent of the respondents expect no change in rate while 50 per cent of them expected drops in the office and retail sub-sectors.

"Both office and retail markets will continue to be under pressure with rental and occupancy due to oversupply," Sarkunan said.

The firm said the survey was conducted electronically using its database of key industry players.

The breakdown of respondents is 77 per cent developers, 16 per cent fund managers and 7 per cent lenders.


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