BMI View : The outlook for Malaysia's commercial real estate sector has been somewhat clouded over recent months, which has been due to a slowing economy and export sector as a result of China's economic slowdown. However, with signs that the economy is back on track as external demand picks up, we remain confident that demand will continue to grow across the commercial real estate market into 2015.
The Malaysian commercial real estate market has become a focal point for international investors in recent years as developers look to take advantage of the country's fast-growing and increasingly affluent population and growing levels of demand from both the private and public sectors. In particular, the market has seen an inflow of foreign direct investment (FDI) from neighbouring Asian states, including Singapore and China.
However, H213 saw a shift in momentum as a slowing export sector and government efforts to cool speculative property investment saw transactional volumes fall sharply during the first quarter of the year. Meanwhile, there are ongoing concerns surrounding oversupply of commercial property; with an estimated 17mn square feet coming online between 2015-2017 demand would have to double to absorb this supply. The oversupply 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.
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...
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.
- 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).
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.
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.
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.
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.