THE EDGE REAL ESTATE

INVESTMENT FORUM
2019
by Sr Foo Gee Jen, Managing Director of CBRE | WTW

16TH NOVEMBER 2019

 The Golden Question

When will the

market improve?

CBRE | WTW The Edge REIF 2019

 The Future
of Analytics

DATA SCIENTIST

THE EDGE REIF 2019

2019 THUS FAR…
Year-on-year:
Malaysia's Property Market
350000 160000 Volume +6.9%
140000 1H 2019: 160,170 units
Volume (No. of Units)

300000
120000

Value (RM Mil.)

250000
100000 1H 2018: 149,889 units
200000
80000
150000
60000
100000 40000 Value +0.8%
50000 20000 1H 2019: RM68.3 billion
0 0
2016 2017 2018 1H 2016 1H 2017 1H 2018 1H 2019 1H 2018: RM67.7 billion
Volume Value

• Slight improvement but sentiment still on the down side

• Activities on the ground seem to be slow amidst cautious and calculated approach
• Could bring about some opportunistic investments instead of development opportunities

THE EDGE REIF 2019


INDUSTRIAL
• Bright spot of Malaysia’s property
market
• Logistics and warehousing
complement Malaysia’s potential as
distribution hub
HOTEL
• Increasing affluent tourist arrivals
• Visit Malaysia Year 2020 is a highlight
• More entrance of midscale hotel brands
RETAIL
PURPOSE-BUILT OFFICE
• Influx until 2021 pressures occupancy and rental
• Incentives announced in Budget 2020 to attract
Fortune 500 and unicorns - boost demand for high
quality offices
HIGH-RISE RESIDENTIAL
• Developers toning down on super
MARKET high-end products recently
SITUATIONS • Opportunities may appear in the
upscale primary market and
IN 2019 AND distressed assets in secondary
2020 market
LANDED RESIDENTIAL
• More township developments along the
northern and southern corridors of KV
• Primarily sought after by upgraders and
young families
• Top malls expected to retain their • Good quality schemes likely to be
performance better performing residential segment as
• Rental review shall be nominal evident in the southern KV
THE EDGE REIF 2019
 RETROSPECT ON RESIDENTIAL MARKET

DIBS No DIBS

1995 - 2007 2007 - 2009 2010 - 2011 2012 2013 2014 2015 2018 - Present
RPGT RPGT RPGT RPGT RPGT RPGT RPGT, GST SST, RPGT
0 - 30% Exemption Period Flat rate 5% 5 - 10% 10 - 15% 15 - 30% 6% 5 - 30%

300,000 100,000.00
90,000.00
250,000
Volume (No. of Units)

80,000.00

Value (RM Mil.)

70,000.00
200,000
60,000.00
150,000 50,000.00
40,000.00
100,000
30,000.00
20,000.00
50,000
10,000.00
0 0.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Volume Value

THE EDGE REIF 2019

REALITY CHECK ON RESIDENTIAL MARKET

HOC 2019 OVERHANG HIGH-END SUB-SALE

OUTGOING DRIVER ACROSS THE BOARD STABILITY RESTORED OPPORTUNITIES

• RM13.4 bn sales as of 3Q • Almost even spread • Adjustment by • Resultant of the property

2019 – equivalent to a across the price board developers – lesser new hype during 2010 –
quarter’s worth of as of 1H 2019 launches on the super 2014 period
residential transaction high-end products
• Developers need tp • Potential for good buy of
• Need more organic match the demand for • Healthy demand distressed assets
demand in the absence of any products including
HOC in 2020 and beyond the affordable segment

THE EDGE REIF 2019

RECENT HIGHLIGHTS…
MORE AGILE DEVELOPERS

THE EDGE REIF 2019

RECENT HIGHLIGHTS…
INFRASTRUCTURE IN THE PIPELINE

2020 2021 2022 2024

DASH SKVE MRT 2 LRT 3
Damansara – Shah Alam Serdang – Kinrara – Sungai Buloh – Serdang Bandar Utama – Johan
Putrajaya – Putrajaya Setia, Klang

SUKE
WEST COAST EAST COAST RAIL
Sungai Besi – Alam Damai
EXPRESSWAY (WCE) LINK (ECRL)
– Cheras – Kajang – Ulu
Kelang Banting – Taiping – Kota Bharu – Kemaman
Sabak Bernam – Kiantan – Helebu – Port
Klang

THE EDGE REIF 2019

NATIONAL TRANSPORT POLICY 2019-2030
FOCUS ON RAIL & PUBLIC TRANSPORT

• KL population spend an average of 10% of their disposable

income on transportation compared with only 4% in Tokyo and
Hong Kong.
• traffic jams in the greater KV are costing Malaysia 1.1% to 2.2%
in GDP every year, approximately RM6,144 per person per year.

• additional capacity on the existing KTM Komuter and intercity rail

services which have the potential to be utilised,

• use of big data analysis to manage transportation as well as to

encourage a centralised payment system to improve ease of
usage on public transportation.

THE EDGE REIF 2019

 6Cs OF CONCERNS

China-US Credit Consumption

Trade War Access Confidence

• Slower global trade and GDP growth • Prudent lending by banks, • Labour market generally stable but
forecasted by the IMF and World Bank more scrutiny on applicants wage growth may be selective

Commodity Cost of Corridors of

Prices Living Power

• Wobbly palm oil and crude oil prices • Big ticket items may not be • Policy gerrymandering, policy
priority clarity still lacking

THE EDGE REIF 2019

 3Cs OF OPTIMISM

• FDI picked up again in 1H 2019

• Continuous investments into
infrastructure, education and
• More education on corporate technological advancement
governance and elimination of
unhealthy business-government
Corporate Governance
engagements
• Public sector governance with • Corruption Perception Index 2018:
focus on improving efficiency and Malaysia moved up to 61st globally,
transparency 3rd among ASEAN
• Doing Business 2020 Report:
Malaysia moved up to12th from 15th
• Improve the ease of doing business
and future-proof the labour force

THE EDGE REIF 2019

ONE LAST C…
be Cognisant, Clever and Cultivated

As a BUYER… As am INVESTOR…

• Make informed • Stick to the

decision fundamentals… yield
and growth
• Buy within your
capacity • Avoid herd behaviour

THE EDGE REIF 2019

THANK YOU