‘Johor developers clearing stock, postponing launches’

PETALING JAYA (Jan 29): The second half of 2017 saw some property developers postponing new launches while clearing existing stocks by offering attractive discounts and incentives, including absorbing legal fees, stamp duties and providing furnishing in some projects, according to property consultancy Knight Frank Malaysia.

“The second half of 2017 saw several new launches of landed residential properties in Johor Bahru (pictured) and Iskandar Malaysia amid the soft property market condition.

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“Instead of holding landbank, developers are gradually releasing their products amid in smaller numbers and offer reasonable prices and attractive sales package to attract potential buyers.

“Properties with reasonable selling prices that are strategically located with good accessibility and offer adequate facilities, are still in demand and continue to be well received by the market,” said Knight Frank in its “Real Estate Highlights for 2H2017” report.

In 3Q17, Johor Bahru (JB) led with 3,118 transacted units or about 50.9% of the state’s total volume of transactions, followed closely by Batu Pahat with 649 units (or 10.6%) where double-storey terraced homes recorded the highest number of transactions (1,169 units) in Johor, an increase of about 7.8% as compared to 3Q16.

Meanwhile, the retail sub sector is expected to be more competitive as three newly opened malls, AEON Bandar Dato Onn, Paradigm Mall, and IKEA Tebrau, have increased the supply of retail space by about 2.4 million sq ft, or 12.6%.

“In anticipation of the income tax reduction as announced in the Budget 2018, consumers’ purchasing power should improve and, in return, will help to support the retail market in the near future,” said Knight Frank Malaysia.

As of 1H17, the total retail space in Johor stood at 19.06 million sq ft, a 3.6% increase y-o-y (1H16: 18.40 million sq ft). Occupancy improved slightly to 77.1% (1H216: 75.9%).

Meanwhile, the total purpose-built office space increased by about 5% to 12.25 million sq ft in 1H17 (1H16: 11.67 million sq ft) while occupancy rate dropped to 77.7% (1H16: 80.7%).

Notable developments and catalytic projects in other sectors such as oil and gas, industrial and tourism will help to support the growth of residential, commercial and retail subsectors in Iskandar Malaysia and Johor, in general.

“The Coastal Highway Southern Link, which officially opened in Nov 29, 2017, will improve connectivity to the Second Link and its surrounding areas, thus attracting more investments into this part of Iskandar Malaysia.

“The Pengerang Integrated Petroleum Complex (PIPC), which will contribute about RM8.3 billion to the nation’s gross income by 2020, is expected to be fully completed in 1Q19.

“Currently, the project is on track and about 77% completed as of end-September. The project has generated a lot of job and business opportunities for the local community and this has indirectly helped the growth of the property market in the surrounding areas.

“The recent opening of the Golf-Course in Desaru Coast near Bandar Penawar is expected to promote the tourism sector in Johor, and attract visitors, especially from the Asia-Pacific region,” said Knight Frank Malaysia.

The report also added that as of 3Q17, total cumulative committed investment in Iskandar Malaysia stood at RM244.46 billion, with domestic investment accounting for 61% while the remainder were foreign investment.