RAM Ratings cautious on new mega projects

KUALA LUMPUR: RAM Rating Services Bhd (RAM Ratings) has a cautious view on certain proposed commercial developments, including the 100-storey Warisan Merdeka and the Kuala Lumpur International Financial District.

These additional mega projects, together with those announced earlier under the Economic Transformation Programme, are expected to increase the risk of oversupply of office space in Kuala Lumpur although this could be eased if the developments are carried out on a staggered basis, it said.

On the residential property front, the latest incentives were focused on encouraging first home ownership, particularly of properties priced below RM350,000, RAM Ratings said in a statement today.

However, notably absent were the earlier anticipated tightening of lending requirements to help stem property price escalations and speculative activities in the higher-end segment, it said.

RAM Ratings has a favourable view on the budget's plans for the retail and tourism sectors, in particular initiatives targeted at spurring retail sales and propelling Malaysia as a preferred shopping destination in the region.

However, the impact will probably only be evident in the medium term, it said.

Similarly, other plans, such as those focused on addressing the shortage of medical workforce for the healthcare sector, and those intended to increase broadband reach to underserved areas for the telecommunication sector, are likely to bear fruit in the longer term, RAM Ratings said.

Hence, the rating agency reiterated its stable outlook for these sectors. -- Bernama
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