Week 38 - 2023
RM132.6 BILLION APPROVED INVESTMENTS IN 1H23
The Sun Daily, 18/09/2023
The Ministry of Investment, Trade and Industry (Miti) expects approved investment to record stronger growth in the 2H23 on track to hit its annual target, after achieving RM132.6 billion worth of approved investment in the first half of the year. Malaysia attracted a total of RM132.6 billion (US$28.4 billion) worth of approved investments in the services, manufacturing and primary sectors involving 2,651 projects from January to June and is expected to create 51,853 job opportunities in the country. Notably, direct domestic investment increased by 58% and represented over 52% of approved investments. The recently unveiled New Industrial Master Plan 2023 represents a pivotal step in Malaysia’s journey toward sustainable industrial transformation and enhanced global competitiveness. Domestic direct investment (DDI) accounted for 52.2% of the total approved investment, or RM69.3 billion, driven by investments in the services sector, particularly real estate and primary sector. The country’s main sources of FDI came from Singapore with approved investments totalling RM13.7 billion followed by Japan RM9.1 billion, the Netherlands RM9 billion, China RM8.4 billion and British Virgin Islands RM7.1 billion.
DOMESTIC TOURISM SPENDING SOARS TO RM59.2 BILLION IN 2022
The Edge, 20/09/2023
Domestic tourism in Malaysia recorded encouraging performance in 2022 when it recorded a total expenditure of RM59.2 billion compared to RM17.5 billion in 2021, according to a report released by the Department of Statistics Malaysia (DOSM). The report is based on the Tourism Satellite Account (TSA) whereby the TSA is a statistical framework to measure tourism industry growth and its contributions to the gross domestic product (GDP). There was a significant increase in three main components in the domestic tourism spending in 2022, namely shopping (42.1%), food and beverages (16.4%) and fuel for vehicles (14.9%). International tourism spending also showed a significant increase of RM33.4 billion compared to RM500 million in 2021. This encouraging performance is due to the reopening of the country’s borders to international tourists on 1 April 2022, the scrapping of the need for Covid-19 quarantine and screening tests upon arrival in Malaysia since 1 Aug 2022. Overseas travel also recorded a significant impact, with expenditure totalling RM22.5 billion in 2022 compared to RM10.5 billion the previous year, which is an increase of 114.6%. For 2022, the tourism industry contributed 23.4% to the total workforce, with 3.61 million people employed compared to 3.52 million people in 2021. The tourism sector’s contributions to the GDP grew by 26.7% when it contributed 14% or RM251.5 billion in 2022 compared with 12.8% or RM198.5 billion the previous year. The Tourism Direct GDP in 2022 recorded RM47.9 billion compared to RM11.6 billion the previous year.
ASSOCIATIONS LAUD MOVE TO REQUIRE STRATA RESIDENCE MANAGERS TO BE REGISTERED WITH BOVAEP
The Edge, 21/09/2023
Three associations representing property managers and consultants, estate agents, and valuers have come out to support the government’s move to refine the Strata Management Act 2013 as part of its 12th Malaysia Plan Mid-Term Review revealed this month. In particular, the proposed amendment on the Act includes a requirement for strata residences to be managed by a probationary property manager registered under the Board of Valuers, Appraisers and Estate Agents and Property Managers (BOVAEP). This is part of efforts to further strengthen the function of Joint Management Body (JMB) and Management Corporation (MC), according to the Mid-Term Review report. To clarify, the 2013 Act currently allows the appointment of any persons (registered or non-registered) to manage the common property on behalf of JMB and MC. This provision will be amended to include the requirement that only a registered property manager can be appointed by the developer, JMB, or MC should they decide to hire the third independent party. The Strata Management Act 2013 (Act 757) was brought into force in 2015 with the primary aim of streamlining the law governing the management and maintenance of stratified properties.
GOVERNMENT COMMITTED TO BOTH MRT3 AND PENANG LRT
The Edge, 19/09/2023
The federal government is not shelving the Mass Rapid Transit 3 (MRT3) project, even though it is funding the maiden Light Rapid Transit (LRT) project in Penang at the same time. In the revised Budget 2023 tabled in February the government intends to review the cost of the MRT3 project in the hope of reducing the total amount to below RM45 billion. The government will now review details of the project to ensure the best value for money and is confident of achieving additional savings to bring the total cost to under RM45 billion. MRT3 — also known as the Circle Line — will be the final piece of the Klang Valley Mass Rapid Transit (KVMRT) network that will link the various lines of mass and light rail transits within the national conurbation to form a complete network. MRT3’s alignment will run along the perimeter of the city of Kuala Lumpur. It will be connected to existing MRT, LRT, KTM Komuter and KL Monorail lines through 10 interchange stations. It would have 26 stations, with 19 being underground and 7 elevated, and 2 depots. The Penang LRT is planned to traverse between Penang International Airport in Bayan Lepas to Komtar in George Town and onwards to Tanjung Bungah. The next phase of the line will see the construction of a cross-channel link to Butterworth and onwards to Kepala Batas and Simpang Ampat on the mainland. Another spur line to Air Itam from Komtar is also under consideration. The first phase was estimated to cost RM10 billion when it was part of the Penang Transport Master Plan, which was to be funded by the sale of the land reclaimed under the PSI. However, as the line seems to have been extended to Tanjung Bungah, the cost is likely to be higher.
IJM LAND MAY CONSIDER FORMING REIT IN THE FUTURE
New Straits Times, 18/09/2023
IJM Land Bhd expects significant growth from real estate investment and is contemplating the formation of a diversified real estate investment trust (Reit) in the future. IJM Land plans to build more commercial properties in Pantai Sentral Park (PSP) in Kuala Lumpur and The Light City in Penang. Among them are office towers, hotels, malls, convention centres, retail, wellness, and medical facilities. The assets would mature in three to five years after completion, and worth slightly over RM1 billion collectively. IJM Land is looking for suitable locations for an industrial park development near airports and ports in the Klang Valley and Johor. The long-term strategy is to hold the industrial assets, which could include warehouses, distribution centres, commercial buildings, and staff housing, as recurring income. IJM Land has established a presence in major sites throughout Penang, Kuala Lumpur, Selangor, Negri Sembilan, Johor, Sabah and Sarawak. It currently has a land bank of 4,497 acres and an expected gross development value of RM46 billion.
YTL REIT PROPOSES RENTAL REVISIONS, REFURBISHMENT OF AC HOTEL CHAIN
The Edge, 19/09/2023
YTL Hospitality REIT (YTL REIT) has entered into three supplemental lease agreements for rental revisions and proposed refurbishment of its three hotels (AC Hotels) in Kuala Lumpur, Penang and Kuantan. The lessees of its AC hotel chain are agreeable to the increase in annual rental for all three hotels amounting to a collective RM2.7 million. On its part, the group has agreed to pay for the costs of the proposed refurbishment for all three hotels, at an estimated refurbishment cost of RM38.5 million, which would be funded by borrowings. YTL REIT boasts a total of 10 hotel properties in Malaysia which includes hotel chains such as JW Marriott Hotel Kuala Lumpur, The Majestic Hotel Kuala Lumpur and The Ritz Carlton Hotel Kuala Lumpur.
LAND & GENERAL SAYS JV PROJECT WITH COUNTRY GARDEN IN SEMENYIH SELF-SUSTAINING
The Edge, 19/09/2023
Land & General Bhd (L&G) allayed concerns that liquidity issues faced by joint venture partner Country Garden would have a negative spillover effect on their 167 acre township development in Semenyih that started in 2014. The project is now financially self-sustaining. The whole project is divided into plot A and plot B. Plot A is all done in the earlier years. All terrace houses in Plot B – phases one, two and four are completed and 100% sold. They are now in the midst of building and selling phase five, 201 units of terrace houses, of which 163 units have been sold. L&G owns a 45% stake in Diamond City while the remaining 55% is held by Hong Kong-listed Country Garden. The group’s current landbank stands at 3,288 acres, of which 2,495 acres are estate lands.
TANCO IN JV FOR RM500 MILLION GDV RESIDENTIAL PROJECT IN PUCHONG PERDANA
The Edge, The Sun Daily, The Star, 21/09/2023
Tanco Holdings Bhd has entered into a joint venture (JV) agreement with Accession Development Sdn Bhd to develop a residential project in Pekan Puchong Perdana, Petaling, Selangor. An indirect wholly-owned unit of Tanco, Palm Springs Development Sdn Bhd, will undertake the design features and components of the project. The JV entails 91% being Palm Springs’ stake with Accession having the remaining portion. The estimated time frame for completion of the project is March 2028, or 54 months from the date of the JV agreement. The project will be primarily funded through internally-generated funds and/or borrowings.
TRX RESIDENCES’ TOWERS A AND B TOPPED OUT WITH 90% NON-BUMI UNITS SOLD
The Edge, 21/09/2023
TRX Residences has achieved a 90% take-up rate for its non-Bumi units in Towers A and B. Towers A and B feature a total of 896 units, of which 627 are non-Bumi units. The units’ built-up ranges between 474 sq. ft. to 3,854 sq. ft. and comprise one- to three-bedroom layouts. The selling price starts from RM960,000. Both towers are expected to be completed by 1Q24. Buyers so far hail from 27 countries, including Australia, China, Japan and Singapore. TRX Residences has an estimated gross development value (GDV) of RM4.5 billion to RM5 billion and will feature six residential towers with a total of 2,800 units. The remaining four towers are in planning stage. TRX Residences is part of the 17 acre The Exchange TRX, a mixed-development project jointly-developed by Lendlease and TRX City Sdn Bhd. The mixed-development consists of The Exchange TRX retail (opening on 29 November), a 10-acre rooftop TRX City Park, Kimpton Hotel & Restaurants (opening in early 2025) and a campus-style office block. The Exchange TRX is located within the 70 acre Tun Razak Exchange in Kuala Lumpur.
THE EXCHANGE TRX’S RETAIL PRECINCT TO OPEN ON 29 NOVEMBER
The Edge, 19/09/2023
The Exchange TRX’s retail component in the Tun Razak Exchange, Kuala Lumpur is set to open its doors on 29 November. Visitors can expect a shopping, dining, leisure and entertainment destination in the retail precinct, with an occupancy rate of 95% and over 400 stores spread across 1.3 million sq. ft. of net lettable area. Among the retailers at The Exchange TRX include South Korean eyewear brand Gentle Monster, French-Japanese lifestyle brand Maison Kitsuné and their associated coffee bar Café Kitsuné, Californian athleisure brand Alo Yoga, and Finnish home furnishings brand Marimekko.
The retail precinct will also see beauty brand Drunk Elephant’s first brick-and-mortar store globally. In addition, The Exchange TRX’s Beauty Galleria will feature beauty brands such as Swiss skincare brand La Prairie and French cosmetics house Guerlain — both set to open their first stand-alone boutiques in Malaysia at The Exchange TRX. There will also be new dining experiences in the retail precinct, including Singapore’s Tipsy Flamingo and Amazonas, a Latin American rooftop restaurant by the Kenny Hills Hospitality Group. One of the anchor tenants of The Exchange TRX is Seibu, one of the biggest department stores in Japan, whose presence spans four levels and takes up over 250,000 sq. ft. This will be the first Seibu department store in Malaysia, carrying over 400 brands, of which more than 100 are new-to-market brands, and the lowest floor will be a premium Japanese food hall. There will also be a 10 acre rooftop park atop the retail component. The TRX City Park is accessible to the public, and features cascading greenery, children’s play areas, water features and shaded enclaves.
US-BASED ALTON INDUSTRY TO INVEST RM2 BILLION IN MALAYSIA OVER THE NEXT SEVEN YEARS
The Edge, 19/09/2023
US-based Alton Industry Ltd Group is expanding its manufacturing and research and development (R&D) base into Malaysia and plans to invest over RM2 billion here in the next seven years. The group’s new manufacturing facility in Johor Bahru has already begun and is scheduled for completion next year. Alton produces a diverse range of commercial and consumer tools, hardware and equipment, along with home appliances and floor care products. The group operates in over 75 countries worldwide, with offices in China, Japan, Hong Kong, Europe and the US.
MALAYSIA RECORDED 12.17 MILLION TOURISTS AS OF THIRD WEEK OF AUGUST
The Edge, 19/09/2023
Malaysia recorded 12.17 million tourist arrivals as of the third week of August this year. After fully reopening Malaysia’s borders in April 2022, the government set a target of 16.1 million tourist arrivals for this year, taking into account factors such as limited flights and the reopening of the China border in March 2023. The Tourism, Arts and Culture Ministry (Motac) has implemented various initiatives to ensure Malaysia remains a top destination for tourists worldwide and has had discussions with the Ministry of Home Affairs and the Immigration Department to facilitate foreign tourist entry, including visa-on-arrival, multiple-entry visas, E-Visas and transit visas. Additionally, Motac and Tourism Malaysia have identified key tourist markets beyond Asean countries, including the Middle East, China, India, and Europe.
I-BHD ANNOUNCES PARTNERSHIP WITH WYNDHAM HOTELS & RESORTS
The Edge, 19/09/2023 & The Sun Daily, 21/09/2023
I-Bhd has announced a partnership with Wyndham Hotels & Resorts to rebrand the developer’s 50-storey property in Kuala Lumpur city centre as Wyndham Suites KLCC. The hotel franchisor will also be providing marketing and operational support to the property. The existing property is a luxury condominium with a gross development value (GDV) of RM820 million. Wyndham Suites KLCC will attract families, business travellers and holidaymakers globally to Kuala Lumpur. Apart from the 72 acre i-City development in Shah Alam, with a GDV of RM10 billion, I-Bhd’s other development is the 50 storey 8 Kia Peng luxury development in Kuala Lumpur city centre, with a GDV of RM820 million. The developer has declined to provide further details of Wyndham Suites KLCC, or to confirm whether Wyndham Suites KLCC and 8 Kia Peng are the same development.
MEDICAL TOURISM ALIVE AND WELL
The Star, 22/09/2023
Medical tourists are returning to Malaysia in full force and are expected to surpass the pre-Covid-19 pandemic level in 2019 thanks to the reopening of borders, quality healthcare and competitive pricing. The top countries of origin for these travellers include Australia, Bangladesh, China, India, Indonesia and Japan. Based on data provided by the Malaysia Healthcare Travel Council (MHTC), the number of healthcare travellers showed an increasing trend, reaching a peak of 1.22 million individuals in 2019. However, there was a significant decline in 2020, with only 689,000 healthcare travellers recorded. This downward trend continued in 2021, with the number further decreasing to 561,000. The figure picked up to 850,000 last year, contributing RM1.3 billion in revenue to the country. Among the top treatments sought after in the county are general health screening, cardiology, fertility, oncology and orthopaedics, including medical and surgical-related as well as cancer treatments. The healthcare travel industry is well on its way to achieving post-pandemic recovery, having reached 76% of its pre-pandemic performance of RM1.7 billion in 2019. High-quality medical care at an affordable cost compared with other countries within the region is among the reasons for tourists reaching the country’s shores.
REVIVAL OF STALLED HOUSING PROJECTS
The Sun Daily, 18/09/2023
The state government aims to complete five “sick projects” and one abandoned project involving 1,776 units with a property value of RM682.66 million in 2024. Throughout 2022 and this year and leading up to next year, the property value of sick and abandoned projects that have been or will be completed will reach RM1 billion. For 2022 and 2023, the state government completed six sick projects through intervention methods, involving 1,073 residential units with a property value of RM260.75 million. This included another abandoned project expected to be completed, with the keys handover by October.
JOHOR MEDICAL TOURISM PROMOTION TO GO INTO HIGH GEAR
The Star, 22/09/2023
The state government plans to aggressively promote medical tourism via the recently set-up Johor Medical Tourism Council (JMTC). Medical tourism was among the key initiatives, besides education and heritage, to attract foreign tourists to the state. Johor gets many tourists from Indonesia, Singapore and China who are keen on getting world-class medical treatments at affordable prices here. Many tourists are interested in in vitro fertilisation treatments, and there are 14 private hospitals in the city alone. More Indonesians are expected to visit Johor following the introduction of the Jakarta-Johor Baru route by Indonesia-based TransNusa Airline. The new route by TransNusa Airline will attract more Indonesians to seek treatment at private hospitals, especially in Johor Bahru.
EWEIN BUYS 3.9HA LAND IN SEBERANG PERAI FOR RM39.8 MILLION
The Edge, 18/09/2023
Ewein Bhd is buying a 9.7 acre vacant piece of freehold land in Seberang Perai Tengah, Penang for RM39.77 million. The property developer is buying the land through its indirect wholly-owned subsidiary SkyDorm Sdn Bhd, which is principally involved in construction and letting of industrial properties. The vendors are Tan Hang Soon and Tan Kean Hock. The acquisition is in line with the group’s strategy of acquiring land banks with good development potential for its property development and property management segments. The purchase consideration was agreed on a willing-buyer willing-seller basis and is to be funded via a combination of internal funds as well as bank borrowings.
YBS’ RM567 MILLION PLANT IN PENANG TO BEGIN OPS SOON
The Sun Daily, 18/09/2023
YBS International Bhd’s RM567mil plant in Penang Science Park will start operations by year-end. The plant would focus on producing lithium batteries for use in Internet-of-Things wearables, two-way radios, smartphones and laptops. Besides batteries, the plant will also focus on surface-mounting technology, cable assembly, connector assembly, precision machining and packaging activities.