Investors eyeing commercial properties in 2016

About 72% of property developers, fund and real estate investment trust (REIT) managers and lenders intend to invest in commercial properties in 2016, despite 57% of respondents saying they are less optimistic on the sector’s outlook, according to a new survey by global property consultancy Knight Frank.

In the newly-launched Malaysia Commercial Real Estate Investment Sentiment Survey 2016 by Knight Frank Malaysia, fund and REIT managers are expected to be actively investing in 2016 to seek opportunities in a slow property market.

“Fifty three percent indicated their intention to invest in the office segment and 47% in the retail and healthcare/institutional subsectors. This is provided yield expectations are met,” the report showed.



Although 41% of developers surveyed indicated that they will continue to develop retail properties, only 25% of lenders said funding retail projects is a priority. “This mismatch reflects challenges in funding the retail projects,” it said.

Apart from that, 36% of respondents opined that the healthcare/institutional segment will outperform the other subsectors whilst more than half of them remained neutral on the hotel/leisure and logistics/industrial sectors.

At the same time, the outlook for the office and retail subsectors is less optimistic.

Most of the respondents also agreed that Penang is the most attractive hotspot and it has overtaken Kuala Lumpur/Klang Valley as the most attractive region for commercial property investment, garnering 67% of the overall response.

“Penang is currently the most attractive investment region for hotel/leisure (86%) and healthcare/institutional (79%) developments possibly due to George Town being inscribed as one of UNESCO’s World Heritage Sites and the popularity of the state for medical tourism,” the report showed.

The Malaysia Commercial Real Estate Investment Sentiment Survey 2016 was conducted using an e-survey mechanism distributed throughout Knight Frank’s vast database as well as in-depth interviews with key players in the local commercial sector.

There were some 700 respondents in senior management levels this year, with 55% of them being developers, 21% fund/REIT managers and 24% lenders. - The Edge Property