PETALING JAYA, Malaysia (July 8): According to Knight Frank Malaysia’s Malaysia Commercial Real Estate Investment Sentiment Survey (CREISS) 2021, key players in the commercial property industry are optimistic about the logistics and healthcare sectors, but cautious about the traditional retail and office segments, as well as the hotel/leisure industry. According to Knight Frank Malaysia, severe disruptions to supply chains around the world have revolutionised e-commerce services, and the critical need for good medical and healthcare support amid the pandemic, combined with attractive tax incentives, is expected to drive growth in the healthcare sector.
“It’s no surprise that logistics was the obvious victor as the favored industry to continue to develop well in 2H2021,” stated Knight Frank Malaysia deputy managing director Keith Ooi in a press release. Malaysia’s logistics industry has been steadily expanding in recent years as the country’s e-commerce penetration rate has increased. This, combined with a structural change toward omnichannel retailing, has resulted in a surge in demand for contemporary warehouse space to accommodate the surge in last-mile delivery.
“Prime logistics asset prices are projected to rise further in the short term, driven by strong growth in the e-commerce business, and yields are expected to remain low in the foreseeable future,” he added.
Allan Sim, executive director of Knight Frank Malaysia’s capital markets
“The survey also highlighted that the ecosystem for industrial and logistics is in unison as developers and fund/REIT managers’ appetite for investments into the industrial/logistics sector is harmoniously complemented by lenders who are also expressing higher interest in funding these projects/assets,” said Knight Frank Malaysia capital markets executive director Allan Sim.
“This will act as a significant support for the prospect of increased capital values of logistics assets, further confirming the logistic assets class’s reputation as a darling among investors, fund managers, and developers,” he added.
Meanwhile, more than half of respondents in the healthcare sector foresee a rise in the capital values of healthcare (60 percent) and logistics (58 percent) assets. According to Knight Frank Malaysia, around half of respondents expect capital values to hold in the office and retail sub-sectors, while the percentages of respondents in the industrial and institutional segments are higher, at 67 percent and 70 percent, respectively.
According to the report, the healthcare sector in Penang has piqued the interest of developers and investors. Penang is one of the most desired locations for the majority of health tourists, according to the firm, because Malaysia is now considered among the world’s top health tourism destinations due to its economical and high-quality medical care.
Mark Saw, executive director of Knight Frank Penang
“In January this year, the Penang state government unveiled the joint-venture project between Penang Development Corporation (PDC) and iHeal Health Sdn Bhd to develop the Penang Medical and Digital Technology Hub on 295 acres of land at Bandar Cassia in Batu Kawan,” said Knight Frank Penang executive director Mark Saw. This initiative will contribute to Penang’s promotion as an Asean centre for worldwide medical and digital technology.”
“Other notable upcoming healthcare institutions set to open in the state include Columbia Asia, Sunway Medical Centre, Penang Islamic Hospital, and Georgetown Specialist Hospital, all of which are expected to boost Penang’s medical tourism sector by providing high-quality healthcare services,” he added.
According to the survey findings, there are more factors negatively impacting investment in the commercial property industry in 2021, according to Knight Frank Malaysia.
The third wave of the coronavirus pandemic, the current situation of the economy/government policies, and the cancellation of the high-speed rail (HSR) project were the top three unfavorable causes (>70 percent of respondents). Compression of yield and decreased returns, as well as sluggish Covid-19 vaccine redeployment, were other negative aspects.
Sarkunan Subramaniam, MD of Knight Frank Malaysia
Sarkunan Subramaniam, managing director of Knight Frank Malaysia, is concerned about the sustainability of non-essential services, which have borne the brunt of the lockdowns.
Sarkunan expressed the hope that the vaccine program will be expanded further, since the country’s economic recovery is dependent on its ability to minimize the number of daily new infections and contain outbreaks./n
