Eurozone problems is good news for us

KUALA LUMPUR (Jan 17): The eurozone crisis holds a silver lining for the retail scene in Malaysia, CB Richard Ellis Malaysia (CBRE M'sia) managing director Allan Soo said.

"Following slow sales in Europe as a direct back lash of the eurozone financial crisis, European brands such as H&M and Abercrombie and Fitch are looking at expanding their operations here," Soo said, adding that Malaysia carries only 60% of the global brands,and there is much room for future growth.

Soo was speaking on the retail outlook for 2012 at the fifth Malaysia Property Summit on Tuesday. According to Soo, prices for retail centres along the proposed Mass Rapid Transit (MRT) line is set to see a huge jump as they project an increase of 30% to 40% in footfalls in areas along the MRT line.

"Another trend we can tap into is the wholesale market which had already taken Hong Kong, Korea, and Bangkok by storm," he said, citing wholesale retailers such as Kenanga Wholesale City in Kuala Lumpur, which will prove to be a strong competitor for established shopping malls such as Sungai Wang Plaza and Berjaya Times Square.

"Looking forward, people will increasingly become more price conscious," he added.

On the industrial property market, another speaker — KGV-Lambert Smith Hampton (M) Sdn Bhd executive director (valuation) Anthony Chua — said the recent flooding in neighbouring Thailand may see some international manufacturers, which had suffered losses due to the floods there, investing in industrial properties here instead.

Chua also forsees an influx of Japanese investments as a result of a stronger yen, adding that Malaysia being in the position of the world's top 10 most attractive destinations for foreign direct investment (FDI) according to global management consultant A T Kearney could potentially attract new foreign investors.

The construction of new highways has opened up new industrial development opportunities along the Lekas highway (which connects Kajang to Seremban), South Klang Valley Expressway, SKVE (which connects Bangi to Westport) and Latar highway (which connects KL to Kuala Selangor)

Looking forward, he sees a demand for companies who are seeking to relocate their premises in areas such as Semenyih, Nilai, Rawang, Bukit Beruntung, Alam Jaya, Puncak Alam and Banting.

He added, "Flatted factories ,which were very favoured in the past, will make a comeback. Another trend to look out for is self storage, which is a suitable storage option for small businesses, seasonal goods, and small house owners."

Meanwhile, with regards to the residential property sector, Knight Frank managing director Eric Ooi said, "Gated and guarded townships will still enjoy a very good demand in 2012. However, the case differs with high end condos — with an increase of 20% of condo developments over the past few years, we are now facing an oversupply."

Values had dropped by some 25% since 2010, while rental yields had seen a compression from 6% in 2006 to 4.5% in 2011.

"Developers have to be more careful with their launches in the coming year. More innovative products with better value for buyers are essential for a project to sell well," he noted.