Kuala Lumpur is in a class apart as the country’s business capital and definitely the focus of most activity in residential, retail and office real estate. The city’s central business district is currently undergoing rapid change. However, KL’s long term prospects are not guaranteed despite all the activity. Singapore (pop. 4.5m) is only as far away as London is from Paris and this proximity means that Kuala Lumpur only has Malaysia (pop. 27m) as its hinterland. Given that KL and the KL ‘metropolitan region’ have populations of 1.8m and 6.9m respectively, it seems unlikely that the city can surprise by growing into a different league, either in terms of wealth or size. However, genuine friendliness and cooperation between the two countries could herald impressive new opportunities. WTW’s (CH Williams, Tahar & Wong) series of annual property reviews provides a good breakdown of developments around the country.
The other main growth possibility would seem to be Malaysia potential for tourism and retirement residential property. Peninsula Malaya (Western Malaysia) has well developed tourism infrastructure including coastal resorts and the old colonial hill stations in the Cameron Highlands. Coastal resorts range from Port Dickson, KL’s ‘local’ resort to the excellent beaches on the east coast (Pahang). High quality developments on islands such as Langkawi, Perhentian, Tioman, Pulau Pangkor .
Sabah and Sarawak are becoming increasingly popular as holiday destinations. Once again there are good beaches & rain forests popularised by TV programmes on orang-utans and Kinabalu, Borneo and Malaysia’s highest mountain. There are interesting opportunities in “purchase and lease-back” in luxurious resorts
It is also worth watching the Iskandar Development Region in Johor, adjacent to Singapore. The success of this project is not certain but the government is certainly making investment easier for foreigners in sectors such as logistics and tourism.
For those unwilling to commit to direct investments, opportunities to invest in real estate investment trusts quoted and managed in Singapore are worth considering but for the time being Malaysia has high withholding tax on profits from property investment trusts
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