Press Release: Return of the REITS? Malaysian market poised for innovation as property sector seeks to shake off economic downturn
Cityscape Asia to throw the spotlight on policy settings in regional property markets at Suntec, Singapore,19-21 May 2009
With Malaysian REITS down but not out in the face of an economic downturn the
Malaysian Government has bolstered this popular investment class with a 2009
Budget allowing REITs to open their investor register to up to 70% foreign ownership.
With some M-REITS being 10-45% off their 2007 peaks the move has been
welcomed by the sector says Elvin Fernandez, a Malaysian property valuer and
Managing Director of the Khong & Jaafar Group of Companies, who is a speaker at
the upcoming Cityscape Asia conference in Singapore on 19-21May.
“The incentive is ‘right on the button’ as it was awaited by REIT managers and the
market for the industry to leap into a period of sustained higher growth and hopefully
stake a claim as a regional centre for the REIT industry,” Mr Fernandez said.
While political uncertainty and rising unemployment has impacted market confidence
in Malaysia, some key indicators remain sound. Prime office real estate is still
generating yields in the region of 7-8%, while the residential market, although
currently subdued, is supported by the youthful country’s extremely high rate of new
household formation who demand about 80,000 units of houses from the primary
market per year, according to Mr Fernandez.
“For Malaysia as a whole, the key relationship between house price increases and
income increases has also been tracking in unison over the past 12 years,
suggesting a basis for reasonable price support in the market,” Mr Fernandez said.
Malaysian house prices increased at a compound annual rate of 5.09% over 12
years, while household income was up by 5.14% per year over the same period.
“With property (from construction and services) directly contributing some 6.5% of
Malaysia’s economy, but impacting as many as 140 other industries and services
indirectly, the health of the property sector is a matter of national importance and this
explains the Government’s helping hand to the REIT sector,” Mr Fernandez says.
A strong contingent of Malaysian developers is also showing at the Cityscape Asia
exhibition to be held at the Suntec Convention Centre. Confirmed exhibitors include
Mah Sing Group, EPAD, RS Capital, East Ledang, Danga Bay, Mulpha, NASA TTDI,
Camko City, and a number of developers from the Iskandar Development Region
which is backing up its successful foray at Cityscape Abu Dhabi with the opportunity to access South East Asian and Chinese investment at the Singapore event. They
will also come together during the exclusive Cityscape Asia Investors & Developers
Networking Reception to forge international relationships and discuss business and
investment issues.
The role of other regional Governments will also be under the spotlight at Cityscape
Asia. The Singapore Government pleasantly surprised the local property sector with
a 40% rebate on property taxes in its January 2009 stimulation package, while the
Vietnam Parliament is debating changes that could increase sales volumes to
overseas-based Vietnamese by as much as 1000% per year from September 2009.
In Jakarta, major Government-backed infrastructure projects such as a Monorail,
MRT and Airport link are boosting the property sector while stronger regulations for
property valuation have improved transparency in debt finance and capital markets
over the past few months.
Cityscape Asia
Cityscape Asia – part of the world’s largest business-to-business real estate event
brand – is an annual exhibition and conference focusing on all aspects of the real
estate development cycle. The three day event will run from 19 – 21 May 2009 at the
Singapore International Convention and Exhibition Centre (Suntec Singapore).
Top deal-makers from leading developers, banks, institutional investors and
investment authorities, as well as senior officers from foremost private equity funds
and investment advisory firms will gather at Cityscape Asia to discuss key issues and
investment opportunities.
Conference highlights include: surviving the global financial crisis; the future for real
estate funds; Asian REITS; markets to invest in for long-term growth and returns;
country spotlights in troubled times; the Asian retail decade; and green investments.
Cityscape Asia is an extension of the phenomenally successful Cityscape Dubai
exhibition, organised by IIR Middle East, which also include Abu Dhabi, India, Saudi
Arabia, Russia, USA and Latin America.
UK-based Scala Land Group is a Gold Sponsor at Cityscape Asia. Scala Land Group
presents overseas investors with alternative opportunities to buy land in the UK.
CNN is the international broadcast partner.
For more information about Cityscape Asia 2009 and related events, please visit:
www.cityscapeasia.com
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