The Standard (24 August 2022)
Investors look to the geopolitical haven of Malaysia to park their money
Investors look to the geopolitical haven of Malaysia to park their money
In stark contrast to China’s steadfast implementation of a zero-covid public health policy, Southeast Asia has opted to “live with covid”. When China reinstated lockdowns in the major cities of Shanghai and Beijing earlier this year, Southeast Asian countries like Malaysia reopened their international borders ahead of the busy summer travel season to allow vaccinated travellers to freely enter.
Malaysia records an 8.9% GDP growth in the second quarter of 2022
Driven by a revival in tourism, growth in commodity prices, and demand for semiconductor exports, Malaysia’s economy recorded an 8.9% GDP growth in the second quarter of this year according to the latest statistics from its central bank.
“Malaysia’s real estate market is showing signs of recovering from the slowdown caused by the covid-19 pandemic. This is reflected by the growth in total transaction values by 21.7% year on year between 2021 and 2020 to USD 33 billion,” says Dr Theresa Fok, Founder & Managing Director of Jade Land Properties.
As Asia’s only major net supplier of oil and gas and the world’s second largest producer of palm oil, Malaysia serves as an inflation hedge to rising global commodity prices.
She points out that the pandemic has directly contributed to global inflation pressures due to prolonged supply chain disruptions, government stimulus packages, pent-up demand, and exacerbated by the Russo-Ukrainian war. Food and energy prices are hitting record highs. Fok urgently advises individual investors to review and revise their investment allocations to adapt to the changing economic environment.
“Malaysia benefits from a diversified export base by being Asia’s only major net exporter of oil and gas and the world’s second largest exporter of palm oil.” Fok continues. “In this respect, the region serves as an inflation hedge. Strong commodity prices will bolster the balance sheet of the Malaysian government, leading to more infrastructure investments, which directly correlate with GDP growth.”
Multinationals look to Malaysia as an alternative manufacturing base to China
The pandemic triggered multinationals ranging from clothing to consumer electronics to reassess their sources of raw materials, and parts assembly. Given China’s ongoing battle with covid-19, companies are reducing their operations there and are turning to neighbouring Southeast Asia to secure their supply chains.
“Malaysia plays an indispensable role in the global semiconductor supply chain accounting for 13% of the world’s supply. The country’s semiconductor industry is concentrated in the island-state of Penang, which represents 80% of the nation’s contribution. Last year, Penang registered the largest share of foreign direct investment of USD17 billion in its manufacturing industry in Malaysia in 2021.” Fok says
“Furthermore, Malaysia’s technology sector stands to benefit from geopolitical issues arising from the US-China trade war. Semiconductor companies are announcing investments in fabrication plants to meet increasing demand. In December 2021, Intel the world’s largest semi-conductor manufacturer further invested USD7 billion to create a new advanced facility in Penang’s Bayan Lepas Free Trade Zone.”
Malaysia is expected to be the largest beneficiary of the RCEP free trade agreement in terms of gains in exports
In March 2022, Malaysia joined The Regional Comprehensive Economic Partnership (RCEP), which is the world’s largest free trade agreement (FTA) between 10 ASEAN member countries with China, Japan, South Korea, Australia and New Zealand. The FTA covers a population of 2.2 billion and a combined GDP of USD26.2 trillion or 30% of global GDP.
Malaysia will benefit from the eventual removal of 90% of tariffs between member nations and a reduction of non-tariff trade barriers. The country will also enjoy an enhanced business environment, with new regulations on intellectual property protection and e-commerce.
According to Malaysia’s Ministry of International Trade and Industry, Malaysia is expected to be the largest beneficiary of the agreement in terms of gains in exports with a projected USD200 million increase among the ASEAN countries.
Malaysia welcomes foreigners to own property and land on a freehold basis
Malaysia is a popular location for foreigners to invest in property given the ease of owning freehold property and even land compared to most of its Southeast Asia counterparts like Thailand and Vietnam. As a former British colony, Malaysia upholds a common law legal system and English is used in business dealings.
Jade Land Properties – an award-winning EAA licensed real estate agency based in Hong Kong
Fok says that, Jade Land Properties has established a reputation for only collaborating with distinguished property developers with positive track records. With a history of close to 30 years, the team at Jade Land has extensive international property investment experience. In December 2021, Jade Land secured UK private equity firm Shojin Property Partner’s bulk investment of 20 units in landmark smart city development, Muze at Penang International Commercial City (PICC).
Jade Land will be hosting a Malaysia property exhibition over the weekend for two of their handpicked exclusive developments, PICC and YOO8 Serviced by Kempinski at 8 Conlay.
“YOO8 Serviced by Kempinski at 8 Conlay”
Kuala Lumpur City Centre (KLCC) Branded Residences with 5-star hotel service
What is the definition of a branded residence? Branded residences are traditionally a strategic partnership between a reputable hotel brand and a property development. Through this direct association, the property naturally benefits from the hotel group’s well-established and positive brand image. Instilling buyer confidence in the building and facility’s quality, management service and security – all delivered by the trusted brand.
Fok advises that niche developments in prime locations remain a key interest to investors. This is corroborated in Savills’ global study on branded residences, which highlights that this property type will continue to see extraordinary growth (230% in the last decades). Incidentally, the latest Savills spotlight on branded residence also named Kuala Lumpur within the top 10 of emerging cities to watch out for in the sector.
Fok says that an advantage to investing in branded residences is access to top quality management and maintenance services, which serves to enhance the value of the asset. The presence of a brand increases the visibility of the product when attracting affluent tenants and neighbours or future re-sale buyers. Given that branded residences are extremely rare on the market coupled with the abovementioned factors, branded residences typically have resilient prices.
YOO8 is situated against the backdrop of the Petronas Twin Towers in KLCC’s Golden Triangle area, the capital city’s most sought-after neighborhood. YOO8 marks globally-renowned YOO interior design firm’s first project in Malaysia. Featuring interiors by celebrity designers Steve Leung and Kelly Hoppen, it will be the world’s tallest spiral twin residential towers upon completion. The residence sits within 8 Conlay, a residential, retail and hotel mixed-development. In addition, the new Conlay MRT and the national landmark “Pavilion” is only steps away from the project.
Sharing the prominent address will be luxury hotel group Kempinski’s first and only five-star hotel in Malaysia. Residents at YOO8 enjoy impeccable service by legendary luxury hospitality group Kempinski Hotels. On top of basic services such as valet parking, concierge, and shuttle bus, be prepared to be pampered from head to toe with room service, housekeeping, butler on call and much more.
There are 66,000 sq.ft. highly Instagramable facilities for residents to revel in. The 26th floor features the Water Lounge, an opulent pool and spa area, jacuzzis and lap pool. The 44th floor features the Green Refuge, a multi-tiered park with a one of a kind in-house jogging path suspended in the air.
“Muze at Penang International Commercial City (PICC)”
A landmark smart city development
Adjacent to the Bayan Lepas Free Trade Zone, Penang Golf Club, and Convention Centre, Penang International Commercial City (PICC) is situated in the heart of Bayan Lepas, Penang’s new business district. The Free Trade Zone houses over 300 multinational firms and 3,000 small and medium-sized enterprises with manufacturing facilities specialising in the production of semi-conductors. In fact, Penang’s renowned moniker of “Silicon Valley of the East” was taken after this zone, truly the lifeblood of Penang’s economy. This region has been earmarked by the state government as a major focus in its ‘Penang 2030’ economic transformation plan that aims to improve infrastructure, amenities and living exuberance.
PICC is set to be the first comprehensive mixed-use development in Penang, comprising of a shopping mall, Shama serviced apartments, 5-star hotel, A-grade offices, medical centre, and Central Park. In recognition of the developer’s exceptional contribution to society, Hunza Properties Group was granted permission by the state government to incorporate the “P” for Penang in the project name of PICC.
Implementing the latest in smart home technologies, experience an augmented lifestyle with personalised control of your home. PICC incorporates an all-encompassing smart city function as well. Other innovative features optimise operations through mobile booking for healthcare facilities, smart public lighting, parking management, digital wayfinding, and predictive maintenance for building management.
PICC aims to be a green, smart and family-focused integrated estate. In view of promoting a dynamic new economy on the island, PICC offers well-equipped A-grade offices designed for Business Process Outsourcing (BPO). Here global companies will contract non-primary activities to local third-party providers for services such as finance, human resource, procurement and IT support.
The state government is investing approximately HK$46 billion in the Penang Transport Master Plan with the purpose of enhancing the infrastructure of Penang Island and the Mainland. This includes incorporating monorail and Light Speed Rail (LRT) transit lines, tram lines, and additional main highways. PICC will have its own LRT station within the complex.
The first residential phase of PICC titled “Muze” offers spectacular open views of the Penang Golf Club, Convention Centre and sea.
Kuala Lumpur & Penang Property Exhibition
Featuring two developments: YOO8 Serviced by Kempinski at 8 Conlay and Muze at Penang International Commercial City (PICC)
Prices from HK$2M · 5% predicted rental yield
Up to 70% loans from HSBC & Standard Chartered Malaysia
Date: 26 to 28 August, 2022 (This Friday to Sunday)
Time: 11am to 8pm (By appointment)
Venue: Shop #1, UG/F, Winway Building, 50 Wellington Street, Central
Learn More / Register: https://bit.ly/3wgPCtN
*Jade Land Properties (HK) Limited is the Exclusive Agent in Hong Kong for YOO8 Serviced by Kempinski at 8 Conlay and Muze at Penang International Commercial City (PICC)