Business Monitor International


Malaysia Real Estate Report

Published 23 April 2014

  • 77 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
Malaysia Real Estate Report

Overall, BMI has a positive outlook for the Malaysian commercial real estate sector and we expect the market to remain relatively stable over the next two years. The main risk to our short term forecasts stems from a slow-down in China affecting export oriented sectors and employment which would flow on to impact rental rates in both the industrial and retail sectors in particular. Additionally, local sources are reporting a mismatch of investor specifications and new developments as well as an over-supply of office space. Over the longer term positive demographic factors and increased tourism are looking to support the retail segment.

There are strong downside risks to our forecasts; with an estimated 17mn square feet coming online between 2015-2017 demand would have to double to absorb this supply. The over-supply of commercial real estate could result in depressed rentals and yields. Additional downside risks to the market are the vacancies resulting from a mismatch of specifications and tenant's needs. According to an analyst at Savills Research, there is a trend of tenants leaving buildings that are 10-15 years old as a result of poor maintenance standards. On the bright side we are witnessing an increasing trend of owners of old buildings refurbishing and developing to compete with newer buildings.

While oversupply remains a concern in the office sector, Malaysia's retail sector has benefitted strongly from increased consumption levels flowing from a rising and increasingly urbanised middle class.

We do not expect rents to move much in the short term as demand and foreign investment continues to return to the market; price levels into 2014 will largely be dependent on continued investor confidence Malaysian financial regulation as well as economic data from the United States and China.

Key forecasts 2015

  • Kota Kinabalu is the only region forecasted to experience rent increases for office space over the forecast period, coming in at 5%, whilst Kuala Lumpur...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
13
Business Environment
15
Industry Forecast
17
Office
18
Table: Office Forecast Rents - (USD per m2/month)
19
Table: Forecast Net Yield, 2011-2018 (%)
20
Retail
20
Table: Retail Forecast Rents - (USD per m2/month)
20
Table: Retail Forecast Net Yield, 2011-2018 (%)
21
Industrial
21
Table: Industrial Forecast Rents - (USD per m2/month)
22
Table: Industrial Forecast Net Yield, 2011-2018 (%)
22
Construction And Infrastructure Forecast Scenario
23
Table: Construction And Infrastructure Industry Data (Malaysia 2012-2017)
23
Table: Construction And Infrastructure Industry Data (Malaysia 2018-2023)
24
Macroeconomic Forecast
35
Table: Malaysia - Economic Activity
39
Industry Risk Reward Ratings
40
Asia - Risk/Reward Ratings
40
Table: Asia Real Estate Risk/Reward Ratings, Q314
40
Malaysia - Risk/Reward Ratings
41
Rewards
41
Risks
42
Market Overview
43
Office
46
Table: Office Historic Rents - 2012-2013 (USD per m2/month)
47
Table: Terms of Rental Contract/ Leases - H213
47
Table: Net Yield, 2012-2013 (%)
48
Retail
48
Table: Historic Rents - 2012-2013 (USD per m2/month)
50
Table: Net Yield, 2012-2013 (%)
50
Table: Terms of Rental Contract/ Leases - H213
51
Industrial
51
Table: Historic Rents, 2012-2014 USD/M2
51
Table: Net Yield, 2012-2014 (%)
52
Table: Terms of Contract/Leases - H213
52
Competitive Landscape
53
Company Profile
58
IJM Corporation Berhad
58
Malaysian Resources Corporation Berhad (MRCB)
61
WCT Berhad
63
Ahmad Zaki Resources Berhad (AZRB)
65
Demographic Forecast
67
Table: Malaysia's Population By Age Group, 1990-2020 ('000)
68
Table: Malaysia's Population By Age Group, 1990-2020 (% of total)
69
Table: Malaysia's Key Population Ratios, 1990-2020
70
Table: Malaysia's Rural And Urban Population, 1990-2020
70
Methodology
71
Industry Forecast Methodology
71
Sources
72
Risk/Reward Ratings Methodology
72
Table: Real Estate Risk/Reward Ratings Indicators
74
Table: Weighting Of Indicators
75

The Malaysia Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Malaysia Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Malaysia.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for Malaysia to test other views - a key input for successful budgeting and strategic business planning in the Malaysian real estate market.
  • Target business opportunities and risks in Malaysia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Rankings

BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc