By Tim Leonard
The weak US economy and a slowdown in mature markets should not cloud a potential investor’s decision on the real estate sector in Malaysia.
According to Zerin Properties CEO Previndran Singhe, Malaysia is a “decoupled economy” and is not very much linked to the US economy. “It is nothing more than market sentiment and this too shall soon pass.”
“People are talking about a global slowdown but there has been continuous purchase of KLCC properties by foreigners over the past two to three weeks,” says Previndran. On April 8, The Edge Financial Daily reported that YTL group set a new record for land transaction in the city centre following its RM85 million purchase of a less than an acre tract along Jalan Stonor. The price works out to about RM2,000 psf. He disclosed that the sales volume was still going strong for properties priced between RM1 million and RM1.5 million.
“I have personally seen foreigners and locals snapping up properties here, so what ‘slowdown’ are we talking here?”
Previndran feels that generally, people are cautious but he strongly believes that they will know local market conditions better by the end of the second quarter. “It is just based on ‘perception’ now but once potential investors realise that we in Malaysia are not affected, they will certainly continue snapping up properties here.”
However, he says products that do not match expectations will see slower sales this year. “There are some units built very low in quality and do not match the developer’s promises. These properties will be shunned as buyers are becoming more demanding and selective.”
Nonetheless, properties that match buyers’ expectations will continue being sold, he adds.
Previndran says the price per square foot for KLCC-based properties will have no problems breaching the RM2,500 mark this year. “A lot of positive developments are taking place on the national front following the general election and these only strengthen the country’s fundamentals. So I don’t believe in doomsayers. Things are going to be okay and business will be as usual.”
Previndran, who also runs the property portal www.klcc-living.com, says rents for prime properties in the KLCC area will hold at an average of RM6 to RM8 psf.
He will be presenting an in-depth view of the outlook for the Malaysian property market at the coming The Edge Investment Forum on Real Estate 2008 and whether it is time to make an exit.
