There is a light at the end of the tunnel for the Malaysian property market in 2019, according to Knight Frank.

The global firm's Real Estate Highlights report for the second half of 2018 indicated increased market activity during the review period.

Knight Frank believes the several notable commercial investment activities are a sign of an improving macro trend in the property market. 

Industrial

The report reveals that industrial properties are now moving towards sizeable scale and come with higher specifications, with examples such as Ampang's Area Logistics and Century Logistics’ upcoming headquarters at Bandar Bukit Raja in Klang. 

Knight Frank Malaysia Executive Director of Capital Markets, Allan Sim, said investors and developers would be presented with a unique opportunity gain to attractive monetary returns by providing end-users with the right products in 2019.

"In 2019, we anticipate higher level of land banking activities among industrial property developers," he said.

"This is because strong latent demand continues to be omnipresent - especially for industrial properties with high specifications - as occupiers understand the need to jump onto the Industry 4.0 bandwagon in order to future-proof their businesses."

Knight Frank Malaysia Associate Director of Retail Leasing and Consultancy, Rebecca Phan.

Office

According to the report, the office market experienced no significant change in rentals during the second half of 2018, but there was a slight decline in certain sub-markets.

Knight Frank Malaysia Executive Director of Corporate Services, Teh Young Khean, said there would be more of the same across the next 12 months.

"Moving into 2019, occupancies in selected sub-office office markets are expected to be under pressure due to heightened competition from impending and existing office stock, while rentals will continue to hold steady as newer buildings tend to command higher rates," he said.

"Also, an increasing number of older buildings are looking into repositioning and refurbishment to meet current occupier needs.” 

Retail

Knight Frank's report reveals that the three-month tax holiday period from June to August pushed the consumer sentiment index to a 21-year high of 132.9 points.

Despite a dip after the three-month period, the index remains at more than 100 points. 

Knight Frank Malaysia Associate Director of Retail Leasing and Consultancy, Rebecca Phan, said the retail market is expected to remain competitive as supply outstrips demand.

“As the retail market remains challenging, it can be observed that malls are taking proactive measures to create new experiences in order to remain relevant," she said.

"Moving into 2019, lesser established and new malls without pre-committed take up will find it challenging to compete in this diluted market."

Residential

According to Knight Frank, improving market sentiment was behind an increase of launches in the second half of 2018.

Knight Frank Malaysia Associate Director of Residential Sales and Leasing, Kelvin Yelp, said the next 12 months would bring more motivated sellers and discerning buyers to market.

"Various policies announced in Budget 2019, which are designed to aid first-time homebuyers, are  expected to kick-start the housing market moving into 2019 and beyond," he said.

"Malaysia’s residential properties will continue to be attractive in the eyes of foreign buyers as a result of our liberal policies, reasonable valuations and coupled with no extra stamp duties."

Source: Knight Frank Malaysia

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