Lying in the magnificent Lang valley, Kuala Lumpur property investment is increasingly becoming a worldwide attraction for property investments with all indications showing that the property investment market is destined to become a global attraction. As the tourism industry grows, the capital city s tourist, residential and commercial property markets is also expanding towards the tourist areas as well as social and professional housing needs.
Why Invest in Kuala Lumpur?
Malaysia offers a stable, democratically elected government
The country enjoys a stable economy
Kuala Lumpur has grown extensively and is the regional headquarters of many of the world s major corporations
The old town maintains some links to its colonial past with narrow and winding streets and a delightful hybrid of Chinese and European architecture
Malaysia practices a justice system based closely on the British legal system
Foreigners can buy up to 2 houses and are entitled to 60% bank loans
Kuala Lumpur continues to benefit from a growing tourism market helping to create a mature rental market
Kuala Lumpur is extremely well connected major airlines fly to the Kuala Lumpur International Airport
Kuala Lumpur s education and medical services are some of the best in the Pacific Rim
Past Trends of the Kuala Lumpur Property Investment Market
In the recent past, purchase of investment property was a reserve of foreign companies or local government development partners. Past trends indicate that besides looking for commercial and high-end real estate property sectors, foreign property investors have been seeking to undertake property development projects in the Kuala Lumpur property investment market. For the past decade there has been a steady increase of foreign property investment consortiums in the Kuala Lumpur Property investment sector. The most notable foreign property investment consortiums include Singaporean institutions such as the Government of Singapore Investment Corp (GIC) and Capital land Limited. These international property investors have been taking up equity stake in established Kuala Lumpur property investment companies.
Foreign property Investment consortiums have also ventured into property development in Kuala Lumpur s real estate property. In the past two years this trend has also caught up with other countries such as Indonesia, Hong Kong, Japan, Australia, Europe, South Korea and the Middle East as well as European countries. Recent major office transactions by Middle East consortiums include Macquarie Global who purchased the Empire Tower, Crown Princess Hotel and City Square Shopping Centre in Kuala Lumpur for RM680mil; Injaz Mena Investment who purchased the Menara ING at RM495per square feet; and Injaz Asia Equity who purchased the Kenanga International at RM555 per square feet.
Current Trends of the Kuala Lumpur Property Investment Market
Unlike the past when ownership of investment properties was a reserve of foreign owned companies and government s development partners, Malaysia property investment market has opened up even to individual investors. The Kuala Lumpur property investment market is evidently reaping from the benefits of the Government s attempts to attract both foreign investors and workers. The growing expatriate community, under Malaysia My Second Home (MM2H) or direct foreign investment in real estate, is increasing demand for new accommodation in up-market central districts.
Current trends in the purchase of investment property in Kuala Lumpur are characterized by both real estate property investments within the capital city as well as new investment properties within the coastal resorts. The City s property investment opportunities are growing in line with the direct foreign investments from China, Japan and the US. Off-plan properties are being sold to international property developers with impressive guaranteed rental yield of between 6 and 10 percent.
A survey by Real Estate and Housing Developers Association (REHDA) indicates that enquiries from foreigners for Malaysia s property investments increased by 13% in the second quarter of 2007. Property Investors mainly target the medium to high-end gated and guarded residential projects, prime condominiums and service apartments in and around the Kuala Lumpur City Centre area. Grade A office towers in Kuala Lumpur's central business district, malls, hotels and warehouses with good tenants are also major property investment attractions. With yields in certain countries below 4%, Kuala Lumpur's office assets - yielding 6% to 8% are very attractive. As a result of these increased activities in the Kuala Lumpur property investment market the rental trends have also changed significantly, with a general increase in the value of rents payable.
Future Prospects for the Kuala Lumpur Property Investment Market
Malaysia s property investment market is taking on new dimensions due to a major government s Initiative, the Ninth Plan, which calls for impressive new provisions for the country s infrastructure. Economic experts are predicting that Malaysia s Economy is on a firm long term growth path, with growth of 5.3% reported in the first quarter of 2007. The influx of both foreign businesses and foreign national is increasing every other day.
According to Deutsche Bank, Malaysia is going to sustain a 5.5% annual gross domestic product (GDP) growth till 2020 due to its young population, investment in human capital development and trade openness. Kuala Lumpur real estate property market is the fastest growing property investment hotspot in Malaysia. According to property investment analysts, the recent spate of multi-billion property investments by international consortiums in Malaysia in general is just but an indication of bright prospects for Kuala Lumpur property investment market.
When you add in the fact that unemployment remains low, interest rates are relatively low and the GDP is steady, the building blocks are there for what will be a lucrative property investment market for years to come. The Kuala Lumpur Structure Plan 2020 will be the instrument to guide it over the next 20 years and will also form the basis for the preparation of the Kuala Lumpur Local Plan. Strategies and policies have been formulated in earlier chapters of this Plan, which are derived from the all-embracing vision of Kuala Lumpur as A World-Class City.
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