Malaysian real estate sector could experience slower recovery in 2 hours – CBRE Research

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KUALA LUMPUR (June 17): The recovery of the country’s real estate industry in the second half of this year may be hampered by problems in the construction sector, which is facing pressure to supply raw materials.

CBRE Research Asia Pacific (APAC) executive director Ada Choi said the rental market in Malaysia is expected to stagnate, however, as the research firm expects rents to drop only slightly by less than five percent for 2021.

“Despite blockages similar to those in some countries in the APAC region, we expect the current wave (of the coronavirus) to be brought under control relatively more quickly.

“I see that there will be an improvement, but this will probably be reflected first in demand and the recovery in rental levels.

“Regionally, the economy is expected to rebound despite a delayed recovery in Japan and India,” she said during a Maybank Invest ASEAN 2021 virtual session titled “ASEAN Real Estate: Path To Recovery” today .

Choi, who is also responsible for occupant research and head of intelligence and data management at the research firm, said the rental market in Singapore has already started to stabilize and more investments were returning to the republic.

Reducing office rentals in the future, Choi said landlords would need to rethink the user experience, as occupants would no longer use the space due to rents and locations only, but would also rely more on the attributes of the buildings.

“This includes flexible office options, shared meeting spaces, sustainable settings or cutting edge technology. These will be part of the prerequisites for blue chip tenants,” she said.

She also noted that investment in the region’s real estate sector continues to grow, as research has shown that 96% of those surveyed will increase their investment levels mainly in Australia, Hong Kong and Singapore.

This, she said, strongly implies that there is an opportunity in segments such as logistics, value added or renovations in certain segments, namely for cold storage, retail and hotels.

“We expect the volume of new real estate investments to increase by 10% this year, which remains decent growth, although below the pre-crisis level,” she added.

She also said that the pick-up in occupant demand would be more permanent in the second half of 2021, especially when more people return to work and gain a better understanding of what hybrid work will look like.

“Overall, markets will still favor tenants, but not for very long as many markets will start to recover in the leasing and rental segments.

“Occupiers will need to act before the market fully recovers and for the growing investment activity. It could become more competitive, ”she added.


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