PROPERTY COUNTRY REPORT: MALAYSIA - RapJapan · Hermitage Sri Hartamas 857 474 –1,378 From...

23rd Asia Pacific Regional Conference

29th – 31st October 2015

Jakarta, Indonesia

PROPERTY COUNTRY REPORT:

MALAYSIA

www.vpcasiapacific.com

2

VPC MALAYSIA OFFICES

VPC Offices in

Malaysia


Sabah

Kota Kinabalu

Sarawak

Kuching

Johor

Johor Bharu

Pahang

Mentakab

Kuala Lumpur

Selangor

Petaling Jaya

Kedah

Alor Setar

Penang

Georgetown

Kajang

Sandakan

• Economic Overview

• General Property Market

• Sectorial Property Market

– Residential

– Office

– Retail

– Hotel

• Property Outlook for 2016

3

CONTENT


Exchange Rate

USD 1: RM4.2595

IDR 10,000: RM3.217

4

ECONOMIC INDICATORS


2013 2014 2015 (est.) 2016 (forecast)

Real GDP Growth 4.7% 6.0% 4.5% - 5.0% 4.0% - 5.0%

Current GDP (RM Billion) 984.85 1,069.26 1,128.16 1,206.93

Exports (RM Billion) 719.99 765.42 498.08 (Jan to Aug)

Import (RM Billion) 648.7 682.94 443.83 (Jan to Aug)

International Reserves

(RM Billion)441.7 405.5 418.0 (October)

International Reserves

(USD Billion)134.9 116.0 94.1 (October)

Exchange Rate (USD to

MYR)3.2815 3.495 4.3425

Source: Bank Negara Malaysia & Ministry of Treasury

5

BRIEF ECONOMIC INDICATORS

• Central Bank Overnight Policy Rate: 3.25%

• Base Lending Rate: 6.85%; Average Base Rate: 3.88%

• Housing Loan Rate: 4.45% to 5.25%

• Unemployment Rate: 3.1%

• Inflation Rate: 3.18%

• Main Exports: Electrical and Electronics products,

Petroleum products and Liquefied Natural Gas (LNG),

Rubber, Oil Palm, Timber and Tin.


6

ECONOMIC OUTLOOK 2015


• Overall , the country’s economy is projected to grow by 4.5% - 5.0% in

2015 and only 4% - 5% in 2016.

• Malaysia’s domestic demand is expected to lose some momentum

from lower private consumption as households reduce their purchases

due to the implementation of the Goods and Services Tax (GST).

• The Ringgit Malaysia had dropped 30% and will remain weak.

• Decline in revenues, especially Crude Petroleum and commodities.

Slowdown in exports will likely continue, attributed to lower commodity

exports and prices.

• Declining Foreign Direct Investment expected.

• Signs of voluntary retrenchment and layoff of workers in the banking,

oil and gas and manufacturing industries.

7

PROPERTY MARKET: GENERAL


1H2014 1H2015 % Increase

Transactions Volume 122,830 119,599 -2.63%

Transactions Value (RM MN) 40,301.66 37,977.75 -5.77%

• The property market performance has softened in first half of 2015 as

compared to a year ago.

• The volume and value of transactions dropped by 2.63% and 5.77%

respectively in the first half of 2015 against first half of 2014.

• Based on the market observation, the home buyers are expecting to buy

properties before the implementation of Goods and Services Tax (GST).

However, the data from NAPIC showed otherwise. In Kuala Lumpur, the

volume of residential transactions declined sharply by 21.2% in 1Q2015

when compared to 4Q2014, likely attributed to the current economy

slowdown and stringent lending guidelines.

Source: NAPIC

8

PROPERTY MARKET: GENERAL


The slowdown of the property market is due to:

• Central Bank tightening up the mortgage loan

• Oversupply in certain sub-sector market

• Government cooling measures such as

increased RGPT rates and prohibition of

Developer Interest Bearing Scheme (DIBS)

and GST implementation on 1 April 2015.

• Economic slowdown

• Poor Market sentiments

9

RESIDENTIAL SECTOR: 1H2015


• Dominate the overall property market inthe 1H2015, with 64.1% of the totalvolume and 49.3% of the value oftransaction.

• 119,599 transactions worth RM38 billionregistered in the 1H2015.

• The volume and value transactions werelower by 2.70% and 6.10% respectivelyagainst 1H2014.

10

RESIDENTIAL SECTOR: SALES TAKE-UP

RATE IN H2015: MALAYSIA


2011 2012 2013 2014 1H2015

New Launches (Unit) 49,290 57,162 62,376 68,351 27,231

Units Sold 22,797 27,264 22,616 30,581 8,542

Sales Performance (%) 46.3% 47.7% 36.3% 44.7% 31.4%

Source: NAPIC

– In the primary market, the overall sales performance was less

encouraging in the 1H2015, with lower take-up rates.

– The take-up rate was lower compared to 2014 (31.4%).

– The number of new launches were much lesser in 1H2015, recording

27,231 units compared with 45,588 units in 1H2014.

– Based on the NAPIC data, of the 10,491 high-rise residential units

launched in 1H2015, only 3,420 (32.6%) were sold. New launches on

terrace houses of 12,146 units in 1H2015 are also preforming less

encouraging with take-up rate of only 31.5% (3,830 units sold).

11

LUXURY CONDOMINIUM: KL


• Notable completed residential buildings in 1H2015 are as follows:-

Project Name Location Area Units

Mirage Residence Jalan Yap Kwan Seng KLCC 102

Rimbun Embassy Row Jalan Ampang Hilir Ampang 56

G Residence Desa Pandan Ampang 474

Madge Mansion Jalan Madge Ampang 52

The Icon Residence Tower C Persiaran Dutamas Mont Kiara 139

Signature Desa Sri Hartamas Mont Kiara 36

Saville Bangsar@ The Park

Block A

Pantai Dalam Bangsar 204

Arcoris Residences Mont Kiara Mont Kiara 331

Total 1,394

12

LUXURY CONDOMINIUM: KL


• Expected new supply of 4,060 units will be completed in 2H2015.

The majority , 1,645 (41%) are located in the City Centre, followed

by 31% (1,256 units) in Mont Kiara locality, 18% (734 units) in

Bangsar/Pantai Dalam locality and 10% (425 units) in Ampang

locality.

• Generally new launches encounter slower sales, but the following

developments received good take-up rate:-

– Picasso Residence (60%)

– Westside III (59%)

– Pavilion Suites (80% during preview launch)

13

NOTABLE NEW LAUNCHES


Project Name Location UnitsFloor Area

(Sq. ft.)

Price PSF

(RM psf)

Tropicana The Residences KLCC 353 710 – 2,973 RM2,600 psf

Pavilion Suites Bukit Bintang 383 704 – 1,254 From RM3,000 psf

Picasso Residence Jalan Ampang 472 1,013 – 2,407 From RM1,076 psf

Damai Residences Jalan Ampang 31 1,938 RM930 psf

Sefina Residensi Mont Kiara 245 1,333 – 1,771 RM800 psf

Hermitage Sri Hartamas 857 474 – 1,378 From RM1,000 psf

Westside III Desa Park City 469 1,077 – 1,927 From RM636 psf

Location of Selected Luxurious Condominiums in Kuala

Lumpur

14

PANORAMA (33-Storey)

Completed: March 2011

Total Units: 223

Dev. Price: RM1,200 psf

Current Asking Price : RM1,390 psf

MARC RESIDENCE (35-Storey)

Completed: August 2007

Total Units: 635

Dev. Price: RM750 psf


ST MARY RESIDENCE (28-Storey)

Completed: 2012

Total Units: 657



SURIA STONOR (23-Storey)

Completed: Apr 2008

Total Units: 138



14www.vpcasiapacific.com

THE BINJAI (44 & 45-Storey)

Completed: End 2008

Total Units: 171



HAMPSHIRE PLACE (30-Storey)

Completed: Sept 2010

Total Units: 186



ST MARY RESIDENCE (28-Storey)

Completed: 2012

Total Units: 657



PARK SEVEN (20-Storey)

Completed: Mar 2008

Total Units: 105


Current Asking Price : RM1,190psf

SURIA STONOR (23-Storey)

Completed: Apr 2008

Total Units: 138


Current Asking Price : RM890 psf

THE AVARE (41-Storey)

Completed: 2009

Total Units: 78



ONE KL (35-Storey)

Completed: 2009

Total Units: 94



THE TROIKA (38, 44 & 55-Storey)

Completed: 2011

Total Units: 229



THE BINJAI (44 & 45-Storey)

Completed: End 2008

Total Units: 171



PAVILION RESIDENCES (43 & 50-

Storey)

Completed: Early 2009

Total Units: 368



MIRAGE RESIDENCE (25-Storey)

Completed: 2015

Total Units: 102



188 SUITES (22 & 26-Storey)

Completed: 2014

Total Units: 446


Current Asking Price : RM950 psf

SOHO SUITES (45-Storey)

Completed: 2014

Total Units: 215

Dev. Price: RM750 – 1,050 psf


VIPOD RESIDENCES (38 & 41-Storey)

Completed: 2013

Total Units: 440



QUADRO RESIDENCES (36-storey)

Completed: 2013

Total Units: 440



BINJAI 8 (40-storey)

Completed: 2012

Total Units: 310

Dev. Price: RM840 – 1,180 psf


Generally, prices of luxurious condo in 2015 had

dropped slightly compared to 2014

vpcasiapacific.com

Location of Upcoming Luxurious Condominiums in Kuala Lumpur

City Centre (KLCC)

Four Seasons Place (65-storey)

Built-up: 1,098 – 11,900 sf

Dev. Price: From RM2,500 psf

Take-up: Approx. 80%

Launched: Jan 2013

Expected: 2016

15

Le Nouvel (43 & 49 storeys)

Built-up: 1,800 – 4,700 sf

Exp. Dev. Price: From RM2,200 psf

Take-up: NA%

Expected: End of 2015

The Mews (38-storey)

Built-up: 922 – 2,623 sf


Take-up: >90%

Launched: Jan 2014

Expected: 2017

Tribeca (37-storey)

Built-up: 510 – 1,293 sf


Take-up: 100%

Launched: July 2013

Expected: Aug 2017

The Ruma (37-storey)

Built-up: 915 – 3,692 sf


Take-up: 95%

Launched: March 2013

Expected: Q12017

15

Manhattan Residen 61

Built-up: 588 – 1,285 sf

Exp. Dev. Price: From RM1,600

psf

Take-up: 88%

Exp. Launched: Mid 2013

Expected: Early 2016

Tropicana Residences (55-storey)

Built-up: 710 – 2,973 sf


Take-up: NA

Launched: Mar. 2015

Expected: 2017

Pavilion Suites (51-storey)

Built-up: 704 – 1,254sf


Take-up: 50%

Launched: June 2015

Expected: 2017


MRT Line 2 – Sungai Buloh-Serdang-Putrajaya: 56 km

MRT Line 1 – Sungai Buloh- Kajang: 51 km

LRT Ampang/Sri Petaling Line

LRT Kelana Jaya Line

17

RESIDENTIAL SECTOR

OUTLOOK: 2015


• Softening demand in the high-rise residential developmentparticularly the high-end products.

• Landed residential property demand is still resilient especiallydevelopment with gated and guarded community.

• Developers are focusing on launching more affordablehousing near the proposed MRT Line 1 and Line 2 and LRTExtension Line.

• House prices is expect to self correct in 2015.

• Foreign investors are actively monitoring residential propertiesin Kuala Lumpur due to weakening of Ringgit Malaysia. Butdue to current political climate in Malaysia, they are stillcautious.


OFFICE SECTOR

• Supply 1H2015

• The performance of purpose built office sub-sector was stable.

• KL City Centre contributes 80.6% of the office space, while the

remaining 19.4% comes from KL City Fringe.

Malaysia 212.9 million sq. ft.

WP Kuala Lumpur88.88 million sq. ft.

(41.75% of national supply)

Completed Office Buildings in KL (1H2015):-

19

OFFICE SECTOR: KUALA LUMPUR


Naza Tower, KLCC

NLA: 505,930 sf

Q Sentral, KL SentralNLA: 1.050 million sf

Summer Suites,

Jalan Sultan Ismail

GFA: 800,000 sf

Menara Centara,

Jalan TAR, KL

NLA: 166,000 sf

Estimate Total Completion:

NLA - 2.516 million sf.

The Crest,

Jalan Sultan Ismail

NLA: 190,000 sf

Estimate incoming supply in the 2H2015:-

20



IB Tower, Jalan BinjaiGFA: 394,000 sf

Damansara City (Pusat Bandar

Damansara)

Tower A: NLA: 506,069 sf

Tower B: NLA: 250,000 sfKL Trillion,

Jln Tun Razak

Est. NLA: 374,000 sf

Menara Bangkok Bank

Jalan Sultan Ismail/Jalan

Ampang

GFA: 464,000 sf

The Vertical Ph.1 (Bangsar South)Block A: NLA: 441,280 sfBlock B: NLA: 381,240 sfKEN TTDI

(Taman Tun Dr. Ismail)

NLA: 258,000 sf



Estimate incoming supply in the 2016 – 2017 :-

21





JKG Tower

(Jln Raja Laut)

NLA: 499,053 sf

Public Mutual Tower

(Jln Raja Chulan)

NLA: 215,000 sf

KL Gateway

(Bangsar South)

GFA: 730,000 sf

KL Eco City

(Bangsar)

GFA: 2.75 million sf

22



• Announcements on up-coming Mega projects in Kuala Lumpur

– KL118 Tower/Menara Warisan Merdeka (118-storey which will

have office space, service apartment, hotel and retail podium).

Estimate GFA: 4.3 million sq. ft.

– Two of the three towers on Lot 185, KLCC will be jointly

developed by KLCC Holdings Sdn Bhd and Qatari Diar Real

Estate Investment Co. (50: 50). One of the towers will have an

anchor in the form of a hotel group – 62-storey hotel building.

The other tower will be an office block.

– JV between UDA Holdings Bhd, Eco World Development Group

Bhd and Employees Provident Fund Board (EPF), jointly develop

the redevelopment of the 19.4-acre ex-Pudu Jail site which will

comprises of a mix of residential and commercial components.

23



• Notable land sales for office developments:

Location/

Dev. NameVendor Purchaser

Land

Area

(acres)

Consideration &

RMpsf

Plot

Ratio

TRX (40-storey)1MDB Real

Estate Tabung Haji 1.56

RM 188.5 million

2,773 psf9.90

TRX (74-storey)1MDB Real

Estate

PT Mulia

Group3.4

RM665 million

RM4,490 psf13.0

TRX (Grade A

office)

1MDB Real

Estate Affin Holdings 1.25

RM255 million

RM4,699 psf15.2

• Selected Grade A+ and Grade A office asking rentals

24



Current Gross Rental (RM

psf/month)

Menara Maxis RM10.50

Menara Binjai RM7.50 – RM8.00

Integra Tower@ The Intermark RM10.00 - RM11.00

Vista Tower RM8.50 – RM9.00

Menara Petronas 3 RM11.00 – RM12.00

Menara Felda RM8.50 – RM9.00

G Tower RM8.50

Menara CIMB RM7.00 – RM8.50

The Garden North and South Tower RM6.80 – RM7.80

Quill 7 RM7.50

25



• Average transaction prices of higher quality office space generally range

between RM1,000 to RM1,200 psf.

• Seller’s market, with active local buyers including institutions, REITs and

private buyers.

• Overall office rents continued to increase in the first half of 2015, but we

have seen in some buildings with rents going down.

• Asking rents of Grade A office buildings in the KL City Centre are about

RM8.50 psf per month. Prime A+ office buildings has exceeded RM10.00

psf per month. They are Menara Petronas 3, Menara Maxis, Integra Tower

and KL Twin Towers.

• Several office buildings are reportedly on the market for sale. They include

Wisma Genting, G-Tower, Menara Prudential, Menara Multi-Purpose, Vista

Tower and Wisma MPL.

• Recent Transactions in 2014/2015

26



Office Building Vendor PurchaserNLA

(Sq. ft.)

Consideration (RM ‘ Million)

Price PSF (RM psf)

Integra Tower, Jalan Tun Razak

Black RockIncorporation

Retirement Fund Incorporated (KWAP)

760,715 1,065 1,400

Menara Raja LautHong Leong Bank

Berhad Hong Leong Assurance

Bhd397,939 220 553

Wisma AmanahRaya AmanahRaya REIT Annex Sentral Sdn Bhd 153,908 78 507

Tropicana Office Tower & Mall*

Tropicana BhdCapital Malls (M)

Trusts101,246 540 983

Block N Empire City Empire Group My EG 238,932 155.35 650

Quill Building 10 Quill Capita Trust Aldwch Capital S/B 68,377 27.3 399

Menara Komtar, JohorDamansara Asset

S/BAl-Salam REIT 160,592 70 436

Plaza Raja Chulan YNL Properties S/BStone Master Corp

Bhd38,280 15 392

Tropicana Office and Mall is an integrated

development. NLA for office tower is 101,246

sf and NLA for mall is 448,248 sf.

• Recent Transactions in 2014/2015

27



Office Building Vendor PurchaserNLA

(Sq. ft.)Consideration (RM ‘ Million)

Price PSF (RM psf)

Nu Sentral Tower 1MRCB Sentral Properties Sdn

Bhd

Malaysian Communications &

Multimedia Commission243,855 283 1,160

Menara ING, Jalan Raja Chulan

Tower REIT Goldstone KL Sdn Bhd 160,413 132.2 824

Wisma Sunway, Shah Alam Sunway Bhd Sunway REIT 171,544 60 350

Wisma Comcorp, Shah Alam Comintel Sdn Bhd Amanah Raya REIT 75,248 30 399

Bangunan Shell, Damansara Heights

Alloy Mtd GroupSuruhanjaya Koperasi

Malaysia212,867 138 648

Platinum Sentral (office space)

MRCB Quill Capita Trust 419,643 624.68 1,489

Bangunan Yayasan Kg. BaruSwasta Setia Holdings S/B

Yayasan Selangor 198,739 50 252

28

OFFICE SECTOR: OUTLOOK


• With at least 6.15 million square feet scheduled to be completed by

end of 2017 in KL, rentals and occupancy rates are expected to

move downwards.

• Current job cuts from bank institutions and Oil & Gas companies will

downsize the office space to reduce the operation costs. We expect

to see rents will decrease in 2015 and 2016.

• However, with limited supply of existing Grade A+ office featuring

MSC status and Green Building Index (less than 10% of the total

supply), demand for this Grade A+ supply is expected to remain

resilient.

• Owing to weakening Ringgit Malaysia, good grades offices with

good yields will be attractive for foreign investment funds to invest in

Malaysia.

29

RETAIL SECTOR: GENERAL


• As at June 2015, total supply of retail space in Kuala Lumpur and Selangor stand at

28.02 million sq. ft. and 32.51 million sq. ft. respectively.

• KL City Centre supply: 23.96%

• KL Suburban supply: 22.34%

• Selangor supply: 53.71%

• Based on market observation, there was a decline in occupancy rate of retail malls in

Klang Valley. Nevertheless, average occupancy rate located in prime retail malls

remains at more than 90% occupancy rate.

• Retailers have experienced a slowdown in retail sales as consumers are cautious on

spending due to the following reasons:

– Implementation of Goods and Services Tax (GST) on 1 April 2015.

– Increase retail prices due to depreciation of Ringgit Malaysia, particularly for

imported goods and services.

– Uncertainty of the financial and employment outlook.

30

COMPLETED RETAIL MALLS IN 1H2015


Jakel Mall

Jalan Munshi Abdullah, KL

NLA: 330,000 sf

Sunway Putra (refurbishment)

Jalan Putra, KL

NLA: 578,000 sf

Atria Shopping Gallery

Damansara Jaya, Selangor

NLA: 450,000 sf

Mitsui Outlet Park Phase 1

KLIA, Selangor

NLA: 269,000 sf

The Place@ One City

Subang Jaya

NLA: 220,000 sf

Total

Completion in

1H2015 -

1.85 million sf

31

NOTABLE RECENT TRANSACTIONS IN 2014/2015


Retail Building Location Vendor PurchaserConsideration

(RM Million)

Selling

Price (RM

psf)

Tropicana City

Mall & Office

Tower

Petaling Jaya Tropicana Corp BhdCapitaMalls Malaysia

Trust540 983

Platinum

SentralKL Sentral MRCB Sentral Prop S/B Quill Capita Trust 70.7 1,258

Subang Avenue Subang JayaSime Darby Brunsfield

Prop Holding S/B

Subang Mall Property

S/B139.5 654

Da:men USJ Subang JayaEquine Park Country

Resort S/B.

Pavilion Reit

Management S/B.488 1,159

KL Festival City

MallSetapak Parkson Holdings Bhd

Festiva Mall S/B. &

AsiaMalls S/B349 716

Mart Kempas

(Hypermarket)Johor Damansara Asset S/B Al-Salam REIT 65 663

Komtar JBCC Johor Damansara Asset S/B Al-Salam REIT 462 1,150

Mydin PenangMydin Wholesale Cash

and Carry S/B

AmFirst Real

Investment Trust250 466

MydinNegeri

Sembilan

Mydin Wholesale Cash

and Carry S/B

Amanah Harta Tanah

PNB (AHP)240 557

32

UPCOMING MALLS IN KLANG VALLEY IN 2015-2017


Development Name Location Area (sf) Expected Completion Date

Evolve Concept Mall Ara Damansara 350,000 End 2015

Glo Damansara Jalan Damansara 360,000 End 2015

Ikea Cheras Cheras 452,000 Nov 2015

Damen USJ USJ 1, Subang Jaya 420,920 Nov 2015

Bangsar Trade Centre Bangsar 100,000 Dec 2015

Sunway Pyramid Ph. 3 Bandar Sunway 65,000 End 2015

Sunway Velocity Cheras 1,000,000 2016

MyTown Next to Ikea Cheras 1,100,000 2H2016

AEON Shah Alam Shah Alam 500,000 2016

Empire City Mall Damansara Perdana 1,800,000 2016

KL Eco City Mall KL Eco City 300,000 2016

KL Gateway Retail Podium KL Gateway 500,000 2016

The Two@ Rawang Rawang 1,350,000 2017

Pavilion Suites Retail Podium Bukit Bintang 240,000 2017

KSL City Mall 2 Klang 2,200,000 2017

33

RETAIL SECTOR: KUALA LUMPUR


• Prime Mall Performance in 2014

Building NameAverage Rental Rate

(RM/sf) 2014

Occupancy

Rate (%)Net Yield in 2014 (%)

Suria KLCC RM45.33 98% NA

KL Pavilion RM24.47 98.1% 6.44%

Mid Valley The Gardens RM14.37 97.6% 6.21%

Mid Valley Megamall RM14.97 99.9% 6.91%

Sunway Pyramid RM13.48 94.8% 6.65%

The Sungei Wang PlazaRM10.25

(2015)

91.9%

(2015)

4.77%

(2015)

The Mines9.57

(2015)

97%

(2015)

7.53%

(2015)

Subang Parade RM8.17 99.3% 7.8%

Plaza Sungei Wang generate the lowest yield.

34

RETAIL SECTOR: OUTLOOK


• Retail sales are expected to be challenging and cautious in 2015 and 2016due to the following reasons:

– Increase retail price due to depreciation Ringgit Malaysia particularlyimport goods and services.

– Uncertainty of the financial and employment outlook.

– Increase fuel price and toll hikes.

– Global economic slowdown has discourage tourists to spend.

– With the scheduled openings 10 new shopping malls by 2015/2016,occupancy rates and rents of retail market will come under pressurewhich is likely affect both rental rates and occupancies.

• Consumers are more towards basic spending and affordable goods andservices.

• Focus is now on online trading and warehouse sales.

• REIT players is expected to remain active to purchase retail malls andhypermarkets.

35

HOTEL SECTOR: GENERAL


Tourist Arrivals

(Million)

Tourism Receipts

(RM Billion)

2015 (estimates) 25.12 70.0

2015 12.56 (Jan – June) 17.5 (Jan – Mar)

2014 (Visit MY Year) 27.44 72.0

2013 25.72 65.44

2012 25.03 60.6

2011 24.71 58.3

2010 24.58 56.5

2009 23.65 53.4

2008 22.05 49.6

2007 (Visit MY Year) 20.97 46.1

2006 17.55 36.3

Source: Ministry of Tourism

36



• Malaysia is experiencing its first slump in foreign tourist arrivals in

decades,

• Tourist arrivals fell by 9.4% in the first half of 2015. There were 12.56

million tourist visitors from January to June, down from 13.9 million

tourist in the first half of last year.

• Total tourism receipts saw a decrease of RM1 billion (RM17.5 billion)

in Q12015 or 5.4% against RM18.5 billion for the same period of

2014.

• The arrivals of tourists from China (-27.1%), Japan (-16.4%), Australia

(-22.7%), United Kingdom (-12.1%) and Singapore (-8.6%) has

dropped this year compared to 2014.

37



• The fall of the tourist arrivals were due to:

– Global economic slowdown and tourists having less money tospend regardless of the exchange rate.

– Implementation of Goods and Services Tax (GST) on 1 April2015.

– Three air tragedies of Flight MH370, MH17 and Air Asia 8501crash in 2014, causing a drop of Chinese tourist arrivals inMalaysia.

• In 2Q2015, the existing supply of hotels stands at 2,829 with205,599 hotel rooms, up 3.7% and 4.35% respectively comparedto 2Q2014.

• According to Ministry of Tourism, average hotel occupancy rate in2014 increased to 63.6% compared to 62.6% in 2013.

38



• The room rates of notable 5-star rated hotels in Kuala Lumpur are

above RM450. This include Traders Hotel, Shangri-La Hotel,

Hilton KL Sentral, JW Mariott, Mandarin Oriental, Ritz-Carlton,

Double Tree Hilton, Grand Millennium and Grand Hyatt Hotel.

• While notable 4-star hotels are recording an average room rate

above RM300. This include Corus Hotel, Aloft Kuala Lumpur and

Novotel Hotel.

• The development of Harrods Hotel in Kuala Lumpur located on a

5.48 acre site to be known as Harrods Square sandwiched

between Jalan Raja Chulan and Jalan Conlay was cancelled.

39

NOTABLE SALES TRANSACTIONS IN

2014 /2015


Hotel Building Vendor PurchaserHotel

Room

Consideratio

n (RM ‘

Million)

Price per

room

(RM)

Double Tree by Hilton, KL Black Rock Inc Royal Group 540 388 720,000

Sunway Hotel, Penang Sunway Bhd Sunway REIT 250 74 280,000

Westin Hotel JBB Hotels Notable Vision Sdn Bhd 443 4551.027

million

Gurney Hotel

Residences, PenangEPF Plenitude Bhd 259 160.1 618,000

Citiview Hotel, Kuantan Citiview Hotel E-Red 84 17 200,000

Lotus Hotel, BrickfieldThe Lotus

Properties

A.M. Green Land Sdn

Bhd44 20.7 470,000

Prescott Hotel, KlangPrescott Hotel

Sdn Bhd

Bandar Baru Pantai Sdn

Bhd158 26.38 167,000

40

NEW COMPLETION HOTELS IN

1H2015 IN KLANG VALLEY


Hotel Name Rooms Rating

D’Majestic by Swiss Garden,

Pudu230 4-star

Sunway Putra Hotel, Jalan

Putra (refurbishment)620 5-star

Best Western @ i-City 214 3-star

41

UPCOMING HOTELS IN KLANG VALLEY


Hotel Name Rooms Estimate Completion Date

St. Regis Hotel, KL Sentral 208 2016

Clermont KL 312 2016

Royale Pavilion Hotel 329 2016

Le Meridien Putrajaya 350 2016

Banyan Tree Signatures Pavilion 143 2016

Hilton Garden Inn, Puchong 255 2016

Autograph Collection@ Empire City 260 2016

Marriott @ Empire City 300 2016

Four Seasons Place 240 2017

The Ruma Hotel and Residences 253 2017

Fairmont Hotel & Resorts 750 2017

Alila Bangsar @ The Establishment 158 2017

Sheraton Petaling Jaya 250 2017

Tropicana Residences & W Hotel 150 2019

Kempinski Hotel and Residences 260 2020

42

LISTED HOTEL REITS

PERFORMANCE


No REITs

No. of

Hotel

Portfolio

Gross Revenue

(2014)

Gross Revenue

(2013)

Gross

Yield

(%)

1YTL Hospitality

REIT*9

RM 98.03 million

(FY2015)

RM 97.95 million

(FY2014)6.40%

2 Sunway REIT* 5RM 61.31 million

(FY2015)

RM 64.63 million

(FY2014)4.64%

3 AmFirst REIT 1RM6.52 million

(2014)

RM 6.048 million

(2013) 6.77%

4AmanahRaya

REIT2

RM6.28 million

(2014)

RM6.15 million

(2013)#

Net

Yield –

5.49%

Note:

* - Sunway REIT & YTL Hospitality REIT - Fiscal year June# - Net Property Income

43

HOTEL SECTOR: OUTLOOK


• Based on the drop of tourist arrivals and tourist revenue recorded in

the first half years of 2015, in our opinion, the expected tourist arrivals

of 29.4 million and tourism revenue of RM89 billion will not be able to

achieve.

• Tourism arrivals and receipts are expected to remain down in 2015

due to the following reasons:

– Politics uncertainty

– Uncertainty on the global economy

– Impact of Haze

• In 2015, we estimate that the Average Room Rate is likely to increase

due to depreciation of Ringgit currency.

44

OUTLOOK 2016


• Overall, property market is expected to be soft due to the following

reasons:

– Government cooling measures

– Central Bank tightening up the mortgage loan

– Economic Slowdown

– Political uncertainty

• Less launches and market activities are expected in 2016.

• Property prices are likely to drop slightly.

45

THANK YOU


PROPERTY COUNTRY REPORT: MALAYSIA - RapJapan · Hermitage Sri Hartamas 857 474 –1,378 From...

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