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City & Country: Cover Story - Tapping the potential of Sabah

DESPITE the incursion in the eastern coast of Sabah earlier last year by an armed Filipino group, the state continues to experience an impressive double-digit increase in tourist arrivals.

In fact, Kota Kinabalu International Airport is the second busiest airport in Malaysia after Kuala Lumpur International Airport.

Based on figures gleaned from Sabah Tourism Board’s website, 2.88 million tourist arrivals were recorded between January and November last year, an increase of 17.2% compared with the same period the year before. In 2012, the state recorded tourism revenue of RM5.17 billion.

A few local consultants in Sabah say that while prices for beachfront land have doubled in several areas, there were very few significant transactions in the last five years.

“Geographically, Sabah is mainly surrounded by sea. However, based on our observations, only small pockets of land have been transacted here and there,” says Chen Yun Ngen, director of JS Valuers Property Consultants (E.M.) Sdn Bhd.

This lack of transactions is because of a scarcity of land and landowners choosing to wait for prices to go up. The market for some of these parcels is further limited by their bumiputera titles, restricting transactions to among members of that community only.

C H Williams Talhar & Wong (Sabah) Sdn Bhd notes that there have been limited transactions of beachfront land along the west coast of Sabah, with only a few for agricultural parcels with potential for tourism.

Parcels in the northern tourism belt, stretching from Tuaran to Kudat, are tagged at RM100,000 to RM200,000 per acre, almost double since five years ago.

In locations such as Kinarut, Melinsung and Beringgis, parcels zoned for tourism that have direct beach frontage and road access transacted at around RM1 million per acre in the last one to two years. Values for similar tracts were at about RM650,000 per acre five years ago.

“Of course, land with good access and scenic beach frontage has the potential to fetch higher prices,” Chen says.

Currently, the most popular beachfront sites in the state are in Tuaran, Kudat and Papar. “These areas are less developed [compared with other sites], yet enjoy good infrastructure and connectivity,” he explains.

He adds that while the southeast region of the state has some of the most beautiful beaches and islands, such as Sipadan, Mabul and Kapalai, it is quite a hassle to get there.

According to Tourism Malaysia’s website, to get to these islands, one has to take a flight to Tawau and then take a taxi, private van or bus to Semporna. The transfer from Tawau to Semporna takes more than an hour while the boat ride to Mabul, which is the jump-off point for Sipadan island explorations, will take 30 to 40 minutes.

Recent notable transactions include Sutera Harbour Resort in Kota Kinabalu and Borneo Golf and Country Club in Bongawan, Papar.

Sutera Harbour announced a change of ownership early this month after Singaporean public-listed property developer GSH Corp Ltd acquired a 77.5% stake in Sutera Harbour Group Sdn Bhd, the owner and operator of the 384-acre resort.

Borneo Golf and Country Club was sold to a Datuk C K Tan, the founder of NewLife International, a company in the business of natural healing and holistic health, a for an undisclosed sum. The 272-acre beachfronting golf course was previously owned by Borneo Golf Resort Bhd.

According to Chen, some of the islands are owned by the state and can be rented from the state government for an undisclosed amount.

One such example is Gaya Island, located 10 minutes off Kota Kinabalu. Gaya Island forms part of the Tunku Abdul Rahman National Park and is home to YTL Corporation Bhd’s Gaya Island Resort and Gloharta (M) Sdn Bhd’s Gayana Eco Resort.

There are also some islands off the coast that are privately owned by individuals or companies.

Among the major five-star resort developers and operators in the state are Shangri-la Group (Shangri-la Tanjung Aru Resort and Spa as well as Rasa Ria Resort) and Karambunai Corp Bhd (Nexus Resort Karambunai).

Sabah is also home to many local-based developers and operators of smaller-scale or lower-range resorts.

Tekun Cemerlang Sdn Bhd is currently developing an environmentally sustainable integrated resort in Tuaran, named the Alila Dalit Bay Integrated Resort, which will be operated by boutique Asian hotelier Alila Hotels and Resorts.


This article first appeared in The Edge Malaysia Weekly, on January 27, 2014.

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