Southeast Asia Outlook 2023

MARKET STATISTICS

OFFICE GRADE A (KL CBD)

RETAIL (KL CBD PRIME)

INDUSTRIAL (GREATER KL)

 6.72

 134  19%

 0.80 - 4.20

Rents Q4 2022 (MYR psf pm) 2023 Forecast

 28.6%

Vacancy Q4 2022 2023 Forecast

N/A

MALAYSIA: KUALA LUMPUR MA R K E T S NA P S H OT

Current Inventory

58.8 Million SF

17.4 Million SF

46,762 Units

Pipeline Supply (2023-2027)

15.2 Million SF

3.7 Million SF

3,225 Units

% of Current Inventory (Pipeline Supply over Current Inventory)

25.91%

21.08%

6.9%







Capital Value Outlook

ECONOMY

*Prime units: Retail units that enjoy strong footfalls with good frontage and accessibility

Malaysia’s economic performance boosted to 8.7% in 2022 as compared to 3.1% in the previous year. This is the highest annual growth recorded within the period of 22 years (2000: 8.9%) mainly attributed by strong commodity exports. Looking into 2023, the fading of base effects and pent-up demand, tighter credit conditions, and a weakening global growth outlook are all expected to pose significant growth headwinds that are projected to slow Malaysia’s GDP growth to 4%.

RECENT SIGNIFICANT DEALS

PROPERTY NAME

PROPERTY TYPE

PRICE (MIL USD)

BUYER

SELLER

DATE

INVESTMENT OPPORTUNITIES

Parcel 1 & 2, Puchong Perdana

Mah Sing Group Berhad

Millennium Acres Sdn Bhd

Industrial

19.5

Q1 2023

1. INDUSTRIAL: The market's demand-supply dynamics continue to be promising, with the logistics sub-sector remaining in focus as fresh supply enters the market to meet the current and future logistic operators' needs. Although there was a notable slowdown in the first half of 2023, the mining and manufacturing sectors are expected to remain a major contributor to Malaysia's industrial production. 2. OFFICE: Due to high supply versus stagnant rental demand, the office market remains saturated. While flight-to-quality relocation is still the most popular strategy, occupiers are set to remain cost-conscious as economic worries mount alongside the pandemic

driven digital and e-commerce trend. Slower economic growth, rising inflation, and concerns about a possible recession in 2023 could all weigh on leasing demand. 3. RETAIL: Despite inflationary pressures that may reduce consumers’ disposable income and spending, the retail sector may continue its recovery path, which is supported by an improved labour market, fiscal incentives, and tourism activities. The reopening of China may result an upsurge in tourist arrivals which can catalyst footfalls and sales further especially in the malls that are favoured by Chinese tourists.

Eco Business Park V (9.81 Acre of land)

Paragon Pinnacle Sdn Bhd

SKB Shutters Corp Sdn Bhd

Industrial

8.2

Q3 2022

Wisma TM Taman Desa

Q3 2022

JAG Land Sdn Bhd

Menara ABS Bhd

Office

8

Warehouse facility in Pelabuhan Tanjung Pelepas (PTP) in Johor

Equalbase PTP Sdn Bhd

Axis REIT

Industrial

92.6

Q2 2022

Empire City Mall (20% stake)

Mammoth Empire, Exsim Development

Rubberex Corp

Retail

47.6

Q4 2021

Source: Bursa Malaysia Announcement, IVPS-C&W Research

29

Southeast Asia Outlook 2023: Bouncing Back Stronger | 30