PETALING JAYA (Jan 27): Total property investment sales in the fourth quarter of 2021 (4Q21) decreased by 51% compared with 3Q21, however, 2021 saw a 117% increase in total major transactions compared with 2020, according to Nawawi Tie Leung Property Consultants Sdn Bhd 4Q21 report headlined "Gradual recovery on the back of positive economic outlook".
The major transactions involved development lands and industrial properties, and there were nine major transactions in investment sales totalling RM473.9 million. Transactions were recorded mainly in Kepong (purchased by Mah Sing Group for RM95 million), Shah Alam (purchased by Goodhart Management Sdn Bhd for RM90 million), Pasir Gudang (purchased by Sinppa Industrial Sdn Bhd for RM65 million), Klang (purchased by Oriental Interest Bhd for RM64.3 million), Ampang (purchased by Mintech Group for RM60 million), Venice Tulip Facility, Pasir Gudang (purchased by Axis Real Estate Investment Trust for RM32 million), Ipoh (purchased by Seri Iskandar Development Corp for RM31.5 million), Kuala Langat (purchased by Posing Marketing for RM26 million) and Serendah (purchased by Dynaciate Group Bhd for RM10.1 million).
According to the report, the continued political instability caused the forecast for the investment segment in 2022 to be sluggish. Sluggish recovery is also expected for the retail and office sectors, leaving only the residential market for bright recovery thanks to the property-related incentives under Budget 2022.
The delay in transition to the endemic phase will cause tardy recovery in retail sales and footfall traffic. The report said: "In 3Q21, retail sales recorded negative growth of 27.8% y-o-y (year-on-year), lower than the initial projection of 15.1%. Given the lower growth rate recorded in 3Q21, the revenue growth management has further revised downwards the retail sales growth forecast for 2021 from 0.8% to 0.5%."
The pandemic's slow recovery also affects the foreign tourist arrivals, and this will continue to affect retail businesses, especially high-end and city centre malls that have been dependent on leisure travellers.
The total completion in the office market for 2021 is 2.3 million sq ft, with no new completion of office buildings in Kuala Lumpur for 4Q21.
The final quarter of 2021 saw a slight improvement in demand from the flexible/co-working space operators with openings such as Common Ground at 1 Power House, Bandar Utama with 16,900 sq ft outlet. Moreover, operators are looking for expansion opportunities outside of Kuala Lumpur. Common Ground, in collaboration with Iskandar Investment Bhd, will be setting up its first co-working space in Medini, Iskandar Puteri, Johor, called Common Ground Iskandar Space.
Signs of recovery for the office sector were seen in 4Q21, with higher volume of leasing activities and viewings, following the relaxation of movement restrictions. The report stated that there will be an incoming supply of 6.6 million sq ft for the office market this year, which will further intensify the competition as well as exert downward pressure on office rental and occupancy.
As for residential, the high-end property market is expected to remain soft due to the wait-and-see approach and slow interest from foreign buyers. Developers are leveraging the seemingly buoyant demand from the mass market, continuing with new projects mainly located at the fringe of the city centre.
"In Wangsa Maju, Sunway Property unveiled Sunway Artessa that offers 468 residential units priced at about RM600 psf. At KL Metropolis, Exsim Group launched Fiddlewoodz that features 679 units of serviced apartments tagged at RM960 psf. Kedah-based Eupe Corp Bhd revealed 821 units of Est8 in Seputeh priced at RM850 psf," the report said.
A bright recovery is projected for the residential market as some developers are planning to start new projects this year, while some plan to hold their launches and focus on clearing unsold stocks.
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