investment hotspots & growth areas: where to build...

28TH FEBRUARY 2017

PREPARED BY SR. FOO GEE JEN

INVESTMENT HOTSPOTS & GROWTH

AREAS:

WHERE TO BUILD AND BUY IN 2017

MALAYSIAN ECONOMIC TRENDKEY ECONOMIC INDICATOR

3 REHDA| REGIONAL ECONOMIC & BUSINESS OUTLOOK CONFERENCE 2017CBRE | WTW

MALAYSIA ECONOMIC : GDPCONTINUE TO BE DOMEST IC DRIVEN WITH PATH TO RECOVERY IS ST I LL STREWN WITH R ISKS

R E A L G D P G R O W T H R A T E

Source: Bank Negara Malaysia

2011 2012 2013 2014 20151Q

20162Q

20163Q

20162016e 2017f

Agriculture, Forestry and Fishing 6.8 1.0 1.9 2.1 1.0 -3.8 -7.9 -5.9

Mining and Quarrying -4.9 1.6 1.2 3.3 4.7 0.3 2.6 3.6

Manufacturing 5.4 4.4 3.4 6.2 4.9 4.5 4.1 4.2

Construction 4.6 18.1 10.8 11.8 8.2 7.9 8.8 7.9

Services 7.0 6.5 6 6.5 5.1 5.1 5.7 6.1

GDP 5.3 5.5 4.7 6.0 5.0 4.2 4.0 4.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

-10

-5

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10

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GD

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MALAYSIA ECONOMIC : COMMODITIESSLOW RECOVERY IN COMMODIT IES PR ICES REMAINS A B IG CONCERNS

C O M M O D I T I E S P R I C E S

0

20

40

60

80

100

120

De

c-1

2

Fe

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Crude Oil (WTI) USD/Barrel(2012 - Dec' 2016)

June’14 = US$ 108.37

Crude Oil WTI Price

51%

Crude Palm Oil Price

Jan’16 = RM2,250.00 /tonne

Dec’16 = RM3,200.00/tonne

42.2%

Jan’15 = RM2,294.00 /tonne

1.9% 36.8%

Dec’16 = US$ 52.62

Jan’ 15 = US$ 47.11

0

500

1000

1500

2000

2500

3000

3500

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Crude Palm Oil (Deld) RM/Tonne(2012 - Dec' 2016)

Jan’16 = US$ 29.78

76.7%

June’14 = RM2,434.5/tonne


4.3349

5.3883

3.0737

0.00

1.00

2.00

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5.00

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7.00

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Ju

n-1

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MY

R(R

M)

USD GBP SGDSource: Bank Negara Malaysia

MALAYSIA ECONOMIC : CURRENCY

WEAK R INGGIT MAY CONTINUE TO OPEN OPPORTUNIT IES FOR FOREIGN INVESTMENT BUT REMAIN CONCERN TO LOCAL DEMAND

M A L A Y S I A N R I N G G I T V S S E N T I M E N T S

AFC Brexit & US

ElectionGFC.COM

BUBBLE

Source: Bank Negara Malaysia, Malaysian Institute of Economic Research (MIER)

0

20

40

60

80

100

120

140

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

1Q

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2Q

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3Q

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BC

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SI (

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ints

)

GD

P g

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th (

%)

GDP (%) Threshold Point CSI BCI (points)


MALAYSIA ECONOMIC : 2017 OUTLOOK• Malaysia’s economic growth is expected to be slower this year in the face of

the challenging global economic and financial landscape.

• Domestic demand will be the key driver of growth, sustained primarily by

private-sector economic activity.

• The well-diversified nature of Malaysia’s exports would continue to support

the overall growth in exports, which is projected to remain positive.

• Headline inflation is expected to remain flat (2016: 3.0%), although

pressured by increases of several price-administered items and the weak

ringgit exchange rate.

• Nevertheless, the impact of these cost factors on inflation would be

mitigated by low global energy and commodity prices, generally subdued

global inflation and more moderate domestic demand.

• Supportive fiscal and monetary policies are expected to be able to steady

the ship for economic growth. Implementation of Goods and Services Tax

would strengthen government’s revenue source to accommodate its fiscal

measures.

KEY FACTORS & CONCERNS AFFECTING THE MARKET


MALAYSIA PROPERTY MARKET OVERVIEW

WHAT CONCERNS THE MARKET?

CommoditiesCredit Crunch

CurrencyCareer Uncertainties

Cost of Living Consumption China Factor



WHAT ARE THE OTHER CONCERNS IN THE PROPERTY MARKET?

Property Affordability

Increasing Costs

GST & Cooling Measures



Source: The Star



PROPERTY MARKET D IPPED FURTHER WITH ACT IV IT IES ACROSS ALL SECTORS REMAIN SLOW

T R A N S A C T I O N A C T I V I E S A C R O S S M A J O R S E C T O R S

-

50,000

100,000

150,000

200,000

250,000

300,000

2010 2011 2012 2013 2014 2015 9M2016

Tra

nsacte

d V

alu

e (

RM

’000)

Total Volume of Transaction

Residential Commercial Industrial

Agricultural Development Land Others

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2010 2011 2012 2013 2014 2015 9M2016

Tra

nsacte

d V

olu

me

Total Value of Transaction

Residential Commercial Industrial

Agricultural Development Land Others

Source: NAPIC, 2010 – Q32016



T R A N S A C T I O N A C T I V I E S B Y S T A T E S

Source: NAPIC, 2010 – 1H2016

MAJOR STATES REMAIN FAVOURABLE DESPITE UNSTABLE PROPERTY MARKET

Selangor23%

W.P. Putrajaya0%

W.P. Kuala Lumpur7%

Johor12%

Perak11%

Penang7%

Sarawak8%

Kedah5%

N. Sembilan4%

Terengganu5%

Pahang5%

Melaka3%

Kelantan4%

Sabah 5%

Perlis1%

W.P. Labuan0%

TOTAL VOLUME BY ALL STATES, 2010

Selangor20%

W.P. Putrajaya0%

W.P. Kuala Lumpur5%

Johor13%

Perak12%

Penang6%

Sarawak7%

Kedah10%

N. Sembilan5%

Terengganu6%

Pahang5%

Melaka4%

Kelantan4%

Sabah 2%

Perlis1%

W.P. Labuan0%

TOTAL VOLUME BY ALL STATES, 1H2016



MALAYSIA PROPERTY MARKET OUTLOOK 2017

• Rising demand for affordable housing

• Genuine demand will lead the market.

• The Market is expected to cool down and stabilise with prices more realistic

• Areas with good transportation connectivity (Near MRT I&II, HSR,

highways-WCE, DASH,SKVE etc) continue to be hotspots

• Strong demographic forces will continue to support demand for residential

properties

• Property investment will continue to be relatively more popular than other

forms of investment

GOOD NEWS

• Long-going concern on the overall weak Ringgit, low crude oil and commodity

prices coupled with geo-political issues worldwide will continue to plague the

economy

• Challenging year for developers

• More savvy home buyers

• The rising of construction cost fuelled by higher oil prices, increase electric tariff

and labour shortage

• Tighter BNM Loan Guidelines – Capital Supply

BAD NEWS



PENINSULAR REMAINS STABLE WITH MORE CONCERNS IN THE EAST

C I T Y P E R F O R M A N C E

p N.A.

u Klang Valley

Penang

Kuching

K.Kinabalu

Bintulu

Labuan

B.Pahat

Malacca

K.Terengganu

Kota Bharu

Ipoh

Alor Setar

q Iskandar

Malaysia

Seremban

Tawau

L.Datu

Keningau

Sibu

Kuantan

Miri

IN 2016: IN 2017:

p N.A.

u Klang Valley

Penang

Iskandar Malaysia

K.Kinabalu

Kuching

Seremban

B.Pahat

Malacca

K.Terengganu

Kota Bharu

Ipoh

Alor Setar

Tawau

q Bintulu

Miri

Sibu

Labuan

Keningau

L.Datu

MALAYSIA PROPERTY MARKET OUTLOOK 2017

OPPORTUNITIES IN THE NEW NORMAL

FORTHCOMING TREND FOR OCCUPIER AND INVESTOR


FUTURE’S INFRASTRUCTURE- LIVING INNOVATION


FUTURE INFRASTRUCTURE – LIVING INNOVATION

MAJOR EXISTING AND UPCOMING PORTS IN MALAYSIA

NEW PORTS , NEW ROUTES , NEW BUSINESS OPPORTUNIT IES

EXISTING PORTS

INCOMING PORTS

KLIA

Penang Port

Port Klang /

Carey Island

Pasir Gudang Port

Kuantan Port

(Expansion)

Labuan Port

Bintulu Port

Melaka

Gateway

K. Linggi Port

Lumut Port

(Expansion)

Tanjung Langsat Port

Tanjung Pelepas Port


EAST COAST RAIL LINE (ECRL)

Source: SPAD

ECRL LINE

EXPRESSWAY

• Linking East Cost Economic Region (ECER) to Greater KL/ Klang Valley efficiently.

• 40%-50% lower transportation cost compared to road transport

• Increase standard of living in the areas along the alignment

600 km rail line

Total Cost: RM 55 Billion

Will be completed in 3 Phases

(2017-2022)

1st Phase

Klang Valley to Kuantan

2nd Phase

Kuantan to Kuala Terengganu

3rd Phase

Kuala Terengganu to Kota Bahru


NEW PORTS , NEW ROUTES , NEW BUSINESS OPPORTUNIT IES


PA N B ORN EO H I GHWAY – L I N K TO A TH OU SAND OPPORTU NIT IES

Source: KOSMO

Year of Completion: May 2021

Total Cost: RM 13 Billion

Phase 1: Dogongan to Papar

(2017) (706 km)

Year of Completion: June 2021

Total Cost: RM 16.5 Billion

Phase 1: Telok Melano to

(2017) Semantan (1,098 km)

Sabah Pan Borneo

Sarawak Pan Borneo

• Rural areas are able to

access the market and

the demand for their

products will rise.

• More plantations, more

factories, more jobs,

more chances for

business, bigger market

for our product



PENANG TRANSPORT

MASTERPLAN

• Proposed Road Network

PENANG TRANSPORT

MASTERPLAN

• Proposed Transport Network


TRADITION. INNOVATION. PERFORMANCE. WORLDWIDE.



Kulim International Airport (KXP)Complements Penang Airport Two lanes Up to 40 millions passenger per year

SPIKE HighwayConnecting Changkat Jering, Perak to Sg Petani, Kedah Shorten Travel Time at North South Highway- avoid congestion at SeberangPerai

PENANG INTERNATIONAL

AIRPORT


PENANG

INTERNATIONA

L AIRPORT

KULIM

INTERNATIONA

L AIRPORT

SPIKE

PENANG PORT

(Cargo)

Source: The Malaysian Reserve


Seberang Perai Utara• Kepala Batas • Bertam

Seberang Perai Selatan• Batu Kawan• Simpang Ampat• Jawi / Nibong Tebal

Barat Daya• Bayan Baru, Sungai Ara• Teluk Kumbar & Gertak

Sanggul

Timur Laut• Seri Tanjung Pinang Phase 2• The Light Future Phases





Source: WCE

PLUS Highway

WCE Highway

WEST COAST EXPRESSWAY

CLOSING THE GAP. INCREASING ACCESSIBILITY .


PROPOSED LRT RAIL NETWORK IN JB

Source: CBRE | WTW Research

• With the support of Rail Transit System and rejuvenation of Sungai Segget, JB CBD is expected to regain its glory. • Property developments close to RTS station are expected to receive good respond. • More commercial activities to take place in JB city centre .


JB-SG RAIL TRANSIT SYSTEM

CLOSING THE GAP. INCREASING ACCESSIBILITY .


Connecting Kuala Lumpur

and Singapore in 90 mins

Year of completion :

2026

Source: New Straits Times


BUILDING THE FUTURE, RESTORING THE PAST



WITH INFRASTRUCTURE REMAINS THE KEY GROWTH, ARE WE MOVING OUTWARDS OR INWARDS?

N E X T H O T S P O T S ?

KLCC

BDR MALAYSIA

KL SENTRAL

Source: SPAD, CBRE | WTW Research


DISCLAIMERS AND WAIVERS

This presentation has been prepared in good faith based on CBRE | WTW’s current views of thecommercial real-estate market. Although CBRE | WTW believes its views reflect market conditionson the date of this presentation, they are subject to significant uncertainties and contingencies,many of which are beyond CBRE | WTW’s control. In addition, many of CBRE | WTW’s views areopinion and/or projections based on CBRE | WTW’s subjective analyses of current marketcircumstances. Other firms may have different opinions, projections and analyses, and actualmarket conditions in the future may cause CBRE | WTW’s current views to later be incorrect. CBRE| WTW has no obligation to update its views herein if its opinions, projections, analyses or marketcircumstances later change.

Nothing in this presentation should be construed as an indicator of the future performance ofCBRE | WTW’s securities or of the performance of any other company’s securities. You should notpurchase or sell securities – of CBRE | WTW or any other company – based on the views herein.CBRE | WTW disclaims all liability for securities purchased or sold based on information herein,and by viewing this presentation, you waive all claims against CBRE | WTW and the presenter aswell as against CBRE | WTW’s affiliates, officers, directors, employees, agents, advisers andrepresentatives arising out of the accuracy, completeness, adequacy or your use of theinformation herein.

28TH FEBRUARY 2017

PREPARED BY SR. FOO GEE JEN

THANK YOU

investment hotspots & growth areas: where to build...

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