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City & Country: An overview of the Sabah market

FROM ITS lush rainforest and spectacular sunsets to its white sandy beaches and scenic mountain range, it is easy to see why Sabah has become a world destination for tourism. Last year, Sabah welcomed more than 3.3 million tourists, with receipts of RM3.069 billion from international travellers and RM3.615 billion from locals.

Spurred by the robust tourism industry, its strong economic growth and an increasing population in the past few years, Sabah’s property market is on the rise, with opportunities for development and investment. It was for this reason that some 60 delegates from more than 20 companies attended the three-day The Edge Malaysia Property Excellence Awards (TEPEA) 2014 Networking Retreat in the Sabah capital of Kota Kinabalu. The retreat was organised by the Sabah government and facilitated by The Edge Malaysia.

Delegates to the retreat, which was held from Oct 17 to 19, included winners, past winners and judges of The Edge Property Excellence Awards (TEPEA) 2014 as well as Sabah’s developers and consultants. Among them were representatives from Sunway Bhd, S P Setia Bhd, Sime Darby Property Bhd, IGB Corp Bhd, Mah Sing Group Bhd, Eco World Development Group Bhd, UEM Sunrise Bhd and MKH Bhd. The TEPEA ceremony and dinner was held on Oct 13 in Kuala Lumpur.

The retreat kicked off with a presentation by Datuk Francis Goh, president of the Sabah Housing and Real Estate Developers Association. He gave an overview of Sabah’s property market and outlook, and a comparison of property development practices between Sabah and Peninsular Malaysia.

Goh said property development is the third highest contributor to Sabah’s economy with RM7.56 billion, after the oil and gas (RM10 billion) and palm oil (RM15.3 billion) industries. He added that development projects worth over RM20 billion are expected to begin next year as Sabah moves to attract manufacturing investments, particularly in the petrochemical and energy sectors, of up to RM5 billion by year-end.

Peter Adam, project manager and project director of Savills (Singapore) Pte Ltd, gave a presentation on the 299ha Tanjung Aru Eco Development (TAED). The RM7.1 billion state-owned project is headed by Chief Minister Datuk Seri Musa Aman.

The TAED is expected to attract investments worth RM5 billion and raise Sabah’s ecotourism profile. It will comprise a hospital, aged care facilities, commercial offices, retail outlets, hotels, a marina and golf course.

The final presentation of the day was by Dr Chong Vun Leong, vice-president of the Development Planning Coordination and Evaluation Division, Sabah Economic Development and Investment Authority. He gave an overview of investment opportunities in the Sabah Development Corridor.

The SDC, which was launched in 2008, is a development blueprint aimed at enhancing the quality of life in Sabah by accelerating the growth of its economy, promoting regional balance and bridging the rural-urban divide while ensuring sustainable management of the state’s resources.

The first day ended with a welcome dinner hosted by Musa. In his address, he said the increasing demand for residential properties provides developers from Peninsular Malaysia the opportunity to expand to Sabah. He added that some top developers already have a presence in Sabah, and their efforts to provide a different line of products — commercial or residential — are welcomed.

“Healthy competition augurs well for end-users, of course. In spite of the challenges facing the property market, I urge developers to ensure that prices do not escalate beyond the means of the people and endeavour to build more affordable housing,” he said.

“It is in this networking trip that you will see Sabah’s potential not only in tourism but also in trade and investment. I hope that by this coming together of top property developers from Peninsular Malaysia and their Sabah counterparts, mutual cooperation will be forged in future.”

Minister of Urban Wellbeing, Housing and Local Government Datuk Abdul Rahman Dahlan was present at the function. In fact, it was Sabah-born Abdul Rahman who first mooted the idea of the networking retreat at the TEPEA last year.

In his speech, Abdul Rahman says, “These [developers] are the very people I believe can help generate stellar ideas that will form the backbone of a development blueprint for [Sabah].”

The Sabah Tourism Board (STB) started the second day with presentations on tourism destinations and potential in Sabah. Marketing manager Simon Jr Jalin talked about the tourist arrivals and receipts as well as hotel inventory. He also touched on the various tourist attractions, such as Mount Kinabalu, North Borneo Railway and Sepilok Orang Utan Rehabilitation Centre as well as resorts, such as Sutera Harbour Resort, Gayana Eco Resort and Shangri-La’s Tanjung Aru Resort and Spa.

STB senior manager of the tourism product division Julinus @ Jeffery Jimit talked about the homestay business in Sabah and its potential for expansion and improvement.

After the lunch hosted by STB, the day continued with visits to three major developments in Kota Kinabalu — Bay 21 by Remajaya Sdn Bhd, The Riverson by Riverson Corp Sdn Bhd and Imago Mall at KK Times Square by Asian Pac Holdings Bhd.

The 26-storey Bay 21 is rated by GreenRE, a green rating tool developed by the Real Estate and Housing Developers’ Association Malaysia. It comprises 286 units with built-ups of 395 to 1,248 sq ft and is expected to be completed next year.

The RM590 million The Riverson is a mixed-use integrated commercial development located on the coastal highway. It features the Gleneagles Kota Kinabalu Medical Centre, 3-storey retail shops (Riverson Walk), a 6-storey block of office suites (Riverson Suites) and a 7-storey block of SoHo units (Riverson SoHo).

Imago Mall is located near The Riverson and is the only non-strata mall in Sabah. It has a net retail space of 800,000 sq ft and will have more than 300 shops, with 140,000 sq ft allocated for a department store and 36,000 sq ft for an all-day al fresco dinning and catering zone. The mall will be completed by year-end.

The retreat ended with a dinner hosted by the Ministry of Urban Wellbeing, Housing and Local Government.

This article first appeared in City & Country, The Edge Malaysia Weekly, on October 27 - November 2, 2014.

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