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Sarawak still seeing growth opportunities; Sabah’s outlook remains bleak – CBRE | WTW

PETALING JAYA (Jan 25): Amidst a general gloomy outlook, Sarawak property market is still seeing a silver lining, led by the development of the state’s oil and gas industry in Bintulu and agricultural sector, said C H Williams Talhar Wong & Yeo managing director Robert Ting.

In a virtual press launch of the “Market Outlook Report 2021” by CBRE | WTW, Ting mentioned that the opportunities of the Sarawak property market will still look promising despite the current Covid-19 situation. 

Sarawak received RM2.95 billion in Sales and Services Tax (SST) from petroleum products’ sales value in 2019 from Petronas, in accordance with the provisions of the Sarawak State Sales Tax Ordinance, 1998, which has contributed significantly to the public coffers in a most needful year. 

Meanwhile, two mining leases were also awarded during the fourth quarter of 2020 to state-owned Petroleum Sarawak Bhd (PETROS), which gives it full control and legal rights over the exploration and production of all the oil and gas in its onshore areas.

The recent news of Shell Malaysia’s relocation of its operations to Miri is a big boost to Sarawak as this shift will potentially impact the economic growth of Miri and Sarawak in the coming years, he said.

On Sarawak’s residential market, Ting noted that the overall market remained stable as demand remained intact. However, there are only small new additions of landed residential due to a scarcity of large land banks, hence upcoming launches will be focused on high-rise residential development.

Though the industrial sector saw a temporary slowdown, it remained stable this year with the government’s support for the SMEs and robust e-commerce activities.

Despite the economic slowdown, foreign investors continue to seek opportunity with the help of Sarawak Trade and Tourism Office Singapore (STATOS), a government initiative to strengthen and promote Sarawak products through new trade, investment and tourism linkage between Sarawak and Singapore to the rest of the world.

Agriculture and cash crop through cluster farming is also an opportunity. With an allocation by the state government of RM797 million to promote and expand the sector, it is expected to be a net food exporter by 2030. This opportunity is also in tandem with the STATOS initiative.

Besides that, the ongoing construction of the Pan-Borneo Highway will give more opportunities for the property market as more projects can be developed along the highway. 

Furthermore, Ting added that the completion of the highway will also help to boost the tourism sector as it opens up new possibilities for more touristic areas along the highway as the Pan Borneo Highway will go along the coastal road for the scenic views.

Sabah: More catalysts needed

Meanwhile, 2020 was a disappointment for Sabah and will continue to look bleak in 2021 as well, depending on the pandemic situation.

Sabah state's main contributor to the economies are the agriculture, specifically in oil palm, petroleum and tourism and service sector especially hotels. However, all these three sectors were not showing promising results in 2020.

The tourism arrival of Sabah saw a decrease of 70% in 2020. This is not a surprise due to the closed border. However, Cornelius Koh, director of C H Williams Talhar & Wong (Sabah) Sdn Bhd, believed that the impact will remain even when the Covid-19 situation has improved as it will take quite a long time for the market to recover and revive as it reorganises itself.

Nevertheless, the silver lining to this is that the tourism sector has an opportunity for a more domestic-driven market focusing on the local people instead of foreign visitors.

Besides that, Koh shared that the oil palm price has improved in comparison to 2020 when the price dropped in early 2020. Therefore, it is an opportunity for Sabah.

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