Friday, March 1, 2013

The hype is now on Malaysian properties

Thanks to the Singapore-KL railway plan and bulk of investors going into Iskandar
Feb 25, 2013 - By: Singapore

Following the announcement that a high-speed rail link would be built between Singapore and Kuala Lumpur by 2020 which could effectively cut travel time to just 90 minutes, it has created a stir among property investors to start planning for their investments across the Causeway.

However, experts warned against any rash purchases as it is still too early to determine how much the convenient transport link could boost home prices in Malaysia. At present, the rail project is still in its infant stage and few details are known, including where the two end-point stations would be sited. Once more concrete details are released and the plan comes to fruition according to schedule, properties in KL are then likely to see an increase in prices.

According to Datuk Yeoh Seok Kian, Executive Director of Malaysian firm YTL Land and Development, he said that the announcement on the rail project would inevitably boost the property markets for both cities. With the transport link, property prices in KL could potentially go up by 30%, after which prices would eventually stablise over time, a situation that models after the markets in Paris and London following the completion of their inter-city rail link.

Mr Eric Chan, Deputy Managing Director of Eastern & Oriental (E&O), noted that Singaporeans have historically formed a significant segment of the firm's foreign buyer profile. This is due to the geographical proximity and cultural connections shared between both countries.

For instance, St Mary Residences - E&O's most recent completed development in the KL city centre has seen one Singaporean buyer out of six. Experts deduced that the property cooling measures introduced in Singapore in January 2013 may have contributed to the growing interest among investors to hunt for properties in Malaysia. Apart from KL, home-buying interest has also risen in Johor, largely due to the multi-billion ringgit development in the Iskandar region.

At present, Singapore has become the largest single foreign investor in Iskandar Malaysia, having invested more than RM5 billion (S$2 billion) into the metropolis. Particularly, CapitaLand, the largest developer in Southeast-Asia had acquired around 28.8 hectares of land on Danga Bay in a joint venture with Temasek Holdings and Iskandar Waterfront for S$324 million. The planned mixed development, which would cover an estimated 11 million sq ft of gross floor area and take about 10-12 years to complete, would have a total development value of S$3.2 billion.

Besides CapitaLand, Rowsley, an investment firm owned by Singapore billionaire Peter Lim, had successfully acquired RSP Architects and a 9.23 hectares plot in Iskandar in an all-share deal worth S$187 million. In addition, Mr. Lim plans to inject another plot in Iskandar into Rowsley in another all-share deal that is worth S$187 million with the aim of transforming Rowsley into a major property player.

According to SGX My Gateway, an investor education portal which monitors local companies with businesses in Malaysia, there are about 170 Singapore-registered companies operating across the Causeway. Some of the largest firms in terms of their market value are Fraser & Neave, CapitaMalls Asia, Shangri-La Asia, OCBC Bank, United Overseas Bank, Great Eastern Holdings and UOL Group.

The hype is all over Iskandar right now. With huge pools of funds going into Malaysia coupled with the development of the Malaysia-Singapore high speed railway link, more and more locals are encouraged to head there to source for property deals.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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