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PETALING JAYA (Feb 19): Property consultancy Rahim & Co International Sdn Bhd expects the overall Malaysian property market to be flat this year except for the industrial segment which will be the “star performer” this year.
“We foresee 2019 to be another flat year as the government continues to implement changes to the country’s property sector,” executive chairman Tan Sri Abdul Rahim Abdul Rahman said at a media briefing in conjunction with the release of Rahim & Co Research – Property Market Review 2018/2019 in Kuala Lumpur today.
*Same old story with office and retail property segments
Abdul Rahim said the property market which has remained slow in 2018, is showing signs of bottoming out as the downward trend in property transaction activities has decelerated last year.
The bright outlook for the industrial sector is driven by the rise of e-commerce and the wave of Industry 4.0 which has shifted a lot of interest to the sector, especially logistics and warehousing, said the firm’s director of research Sulaiman Saheh.
“Industrial sector will probably be the star performer although volume-wise, its percentage share of total market activity is much smaller than the residential segment, which forms two-thirds of the market,” he said.
“The DFTZ (Digital Free Trade Zone) has not kicked-off in a big way right now but it has a lot of potential, especially with it being close to the Kuala Lumpur International Airport. The repositioning exercise of KLIA is going to give positive impact to the logistics market,” he added.
Rahim & Co director of estate agency Robert Ang noted that generally, the industrial sector has constantly been the best performer in terms of yields, with returns of up to 6% to 7%, the highest among the property sub-sectors.
According to Ang, residential properties, especially those situated in prime areas have seen yields coming down to the 3% to 4% range while the yields for office and retail properties are hovering between 5% and 6%.
“Traditionally, the hotspots for industrial sectors are Shah Alam in Selangor, areas with good highway networks and areas that are closer to ports and KLIA” he pointed out, adding that areas along the West Coast Expressway are coming up too.
However, he warned that there could be a risk of an oversupply of industrial space and facilities over the next few years given that many players, both local and overseas, are coming in to build industrial properties.
“I think these new properties will take two to three years to be built. So, we could probably come to a situation where there will be too much space in the coming years,” he noted.
