Flood-hit companies in Thailand looking at Malaysia

KUALA LUMPUR (Feb 16): Some companies hit hard by the heavy monsoon rains and floods that swamped some 1,500 industrial facilities across the central, northern eastern provinces of Thailand from October to December last year will be here next month to source for suitable sites to relocate their facilities.

Kumar Tharmalingam, chief executive officer of Malaysia Property Inc (MPI) revealed that as many as 25 manufacturing companies whose factories and operations in Thailand had been affected badly by the recent flooding will be visiting Malaysia to look at potential industrial sites for their operations.

Kumar was speaking at a seminar jointly organised by the Real Estate and Housing Developers' Association Malaysia (Rehda) and MPI entitled "How to sell Malaysian real estate internationally".

"Most of Thailand is just two feet above sea level. Understanding that, the management of these companies don't plan to risk more floods. They are coming over next month to survey for suitable sites for their factories," said Kumar, adding that their focus is on the northern regions of peninsular Malaysia, such as Kedah or Penang.

The flood, which is reported to be the worst the land of smiles had experienced in the last 70 years, resulted in almost 700 deaths and induced approximately 1.3 trillion baht (RM127.8 billion) of losses to the economy, announced Thailand's Prime Minister Yingluck Shinawatra in early December.

Kumar shared that there are still many untapped opportunities in the region. "We are located in the centre of South East Asia and we remain shielded from any natural disasters. Admittedly, competing with Singapore to persuade MNCs to set up their headquarters here is a far shot, instead we can focus on marketing ourselves as an ideal place for companies set up their back-end operations and a logistics hub," he said.

MPI is also in talks with several Japanese developers who are interested to have joint ventures with local developers to build Japanese style homes in Malaysia for Japanese buyers. "Ideally, this group are looking at areas within Klang Valley or Iskandar Malaysia," Kumar said.

While investors from Korea, Japan, Singapore, United Emirates and Qatar continue to register strong interest in local properties, Kumar said investors from emerging economies — such as China, India and Indonesia — have also been putting down large sums of money on homes in the region, whether for investment, retirement homes or as holiday homes.

Reapfield Properties Sdn Bhd senior vice-president Gerard Kho, another speaker at the seminar, said external factors such as the eurozone sovereign debt issue, disruptions in global supply chain as a direct result of Japan's earthquake and tsunami, rising global inflation coupled with internal factors such as the tightening credit by banks, will result in an overall weaker property market this year.

"Domestic demand will be the driver for Malaysia's economic growth due to policies such as the Economic Transformation Programme," he said, adding that other factors such as the RM6 billion special stimulus package through Private Financing Initiative will boost construction, while tax incentives offered to tenants who commit to locate at the KL International Finance Centre (DTZ) will help boost the market.