Week 4 - 2023
ITALIAN FIRMS TO INVEST RM3.25 BILLION IN MALAYSIA
The Star, The Sun & NST, 24/01/2023
Several Italian companies have expressed interest to invest in Malaysia, given the country’s strategic position as a gateway to Asean and Asia Pacific, said the Malaysian Investment Development Authority (MIDA). The interest, following a visit led by International Trade and Industry Minister, might lead to potential foreign direct investments (FDIs) of RM3.25 billion. The potential RM3.25 billion was expected to be realised from 2023. Italy is Malaysia’s ninth largest foreign investor from the European Union. As of September 2022, a total of 77 manufacturing projects with Italian participation have been implemented with total investments of US$382 million (RM1.4 billion), creating 4,346 job opportunities. MIDA is set to double efforts to pave the way for foreign investors to make Malaysia its investment hub. This includes investors from Italy, who were recently apprised of future Malaysia-Italy business opportunities and strategic collaborations, particularly in fields such as the chemical industry, green technologies, e-economy, smart technologies and IR4.0 value chains.
MALAYSIA’S 2022 EXPORTS THREE YEARS AHEAD OF 12MP’S PROJECTION FOR 2025
The Star, The Sun & The Edge, 27/01/2023
Malaysia’s export performance in 2022 has surpassed the country’s projection for 2025 under the 12th Malaysia Plan (12MP), placing it three years ahead of the target, according to Malaysia External Trade Development Corp (Matrade). The country’s trade — exports, imports and trade surplus — also maintained its stellar performance despite a challenging global environment, showing the resilience of the Malaysian business community amid robust global demand and high commodity prices. Malaysia’s trade for 2022 reached RM2.8 trillion, exceeding the RM2 trillion mark for the second successive year. Exports expanded 25% to RM1.6 trillion, surpassing the RM1.5 trillion mark for the first time. Imports, meanwhile, breached the RM1 trillion mark for the first time, reaching nearly RM1.3 trillion in 2022.
OPR CAN REMAIN AT 2.75% IF INFLATION RATE CONTINUES TO SUBSIDE
The Edge, The Sun, The Star & NST, 26/01/2023
The overnight policy rate (OPR) can remain at 2.75% if the country’s inflation rate continues to subside in the coming months denoted by Economy Minister. Food prices are the largest contributor to inflation in the domestic market. If the inflation rate continues to ease in January and February with the OPR at 2.75%, it would indicate that the OPR can be maintained at 2.75%. The Statistics Department announced that inflation rate eased to 3.8% in December 2022 from 4% in November 2022. On 19th January 2023, the Monetary Policy Committee of Bank Negara Malaysia decided to maintain the OPR at 2.75% after four consecutive increases. The four consecutive rate hikes of 25 basis points each in May 2022, July 2022, September 2022 and November 2022 brought the OPR to 2.75% from a historic low of 1.75%.
THAI CENTRAL BANK RAISES KEY RATE
The Sun, 26/01/2023
Thailand’s central bank raised its key interest rate by 25 basis points for a fourth consecutive, in an attempt to curb high inflation even as the return of Chinese tourists brightens the country’s economic growth prospects. With last year’s headline inflation at a 24-year high, the Bank of Thailand’s (BOT) monetary policy committee, at its first review of 2023, voted unanimously to raise the one-day repurchase rate by a quarter point to 1.50%, as widely expected. Thailand’s economy is expected to continue growing while headline inflation should decline and return to a target range of 1% to 3% late in the year.
NATIONAL HOUSING POLICY WILL BE REVIEWED: KPKT
The Sun & NST, 23/01/2023
The existing National Housing Policy will be reviewed based on the MADANI framework to align with the vision to create a prosperous nation and balance for all Malaysians, according to the Local Government Development Ministry (KPKT). KPKT denoted that through the new housing policy and more organised planning, as well as with the cooperation of all housing agencies at the federal and state levels, and developers, it would be able to achieve the target of providing 500,000 affordable houses by 2025. The ministry is prepared to review existing initiatives, find new incentive opportunities and facilitate all forms of procedures in the approval of housing development so as to give space for active participation by private housing developers to provide affordable houses that are of quality for the people. The ministry also will look into the housing policies in several countries, particularly Singapore, for its success in providing public housing for 80% of its citizens who are eligible, regardless of their race. The ministry planned to share with Singapore its knowledge of the development and management of affordable housing. The new National Housing Policy will take into account the various needs of the people according to their culture, customs, religions and scenarios of the multi-racial society in the country. This is to strengthen the country’s housing development strategy based on the six core values of Madani, namely keMampanan (Sustainability), KesejAhteraan (Prosperity), Dayacipta (Innovation), hormAt (Respect), keyakiNan (Trust) and Ihsan (Compassion).
CONSTRUCTION OF BAGAN DATUK-SEJAGOP BRIDGE TO BE COMPLETED BY APRIL 2023
The Sun, 23/01/2023
The delay in the construction of the Bagan Datuk-Sejagop bridge that will connect Bagan Datuk to Kampung Sejagop in the Perak Tengah district has been overcome and is now expected to be completed before Hari Raya Aidilfitri. Deputy Prime Minister denoted road users will be able to travel along the 10.5 km road and 1.5 km bridge which is an iconic project in Perak on 20th April 2023.
The construction of the RM400 million bridge started at the end of 2016 and was supposed to be completed by October 2020, but the project suffered an unavoidable delay due to the Movement Control Order (MCO), price hike on raw material and lack of labour force and weather. The project is 97% completed as to date and once fully completed it will help in the development of the surrounding areas and encourage investors to this area.
PUTRAJAYA BUSES RECORD HIGHER RIDERSHIP
The Star, 26/01/2023
Nadiputra’s ridership almost doubled in the first two weeks of this year after a new management took over its operations. Rapid Bus Sdn Bhd chief executive officer said over 16,000 passengers have been served so far. There was an average of about 900 daily passengers compared to 500 in the past. The highest ridership recorded to date was on 10th Jan 2023 with 1,484 passengers. Route P101 from Kompleks F to Precinct 5, which is a free service, had the highest ridership so far. The revamped Nadiputra service kicked off with seven new routes. A fare of RM1 was introduced to the previously free service to six of the routes, except for P101. On 16th Jan 2023, a temporary route, P107, was added to support connectivity from Putrajaya Sentral in Precinct 7 to Precinct 9, Persiaran Perdana and Dataran Gemilang. It operates on weekdays only, from 6.30am to 8pm. Route P107 would be terminated once the MRT Putrajaya Line Phase 2 feeder bus starts operating in March 2023.
TWO MILLION ROAD USERS SET TO ENJOY TOLL-FREE LINGKARAN TENGAH UTAMA WHEN COMPLETED IN 2026
The Edge & The Sun, 27/01/2023
A total of two million road users are expected to enjoy the toll-free Lingkaran Tengah Utama (LTU) Expressway, previously known as the Central Spine Road (CSR), especially during festive seasons, when it is completed in 2026. The highway, besides being toll-free, will also help speed up travel time from Kuala Lumpur to Kelantan. The LTU is a high-impact project under the Ministry of Works, which involves six packages from Kelantan to Pahang, covering a total of over 300 kilometres (km), with an allocation of RM10 billion. Section 3J, among others, involves the construction of a new four-lane, two-way road along 6.95km from Kampung Seberang Jelai to Kampung Relong here, and the construction of five bridges that are expected to be completed in July 2024.
DEVELOPER INKS MIDDLE EAST DEAL
The Star, 26/01/2023
MGB Berhad, the construction and property development solutions provider and subsidiary of LBS Bina Group Bhd, has entered into an agreement with Sany Alameriah For Construction Co. (SA). SA is a joint-venture company incorporated in Saudi Arabia between Sany, the second-largest heavy equipment manufacturer in the world, and Alameriah, a renowned developer in Saudi Arabia. It is involved in general construction activities, real estate development, infrastructure, design and build and manufacturing of precast concrete products. SA aims to appoint MGB to design and build up to 10,000 property units, with a total project value of approximately 2.5 billion SAR (RM2.9 billion) to be completed in five years. Additionally, SA intends to collaborate with MGB to operate a precast concrete factory in Jeddah, which is envisioned to supply 1,000,000 m3 precast concrete products for the property units’ construction.
ONE MEMBER ONE HOUSE PROJECT AT SUNGAI BESI TO BE COMPLETED BY END-2024
The Sun, 26/01/2023
The construction of the One Member One House (SASaR) project at Sateria Residensi Platinum South Valley, Bandar Tasik Selatan, Sungai Besi, is expected to be completed by the end of 2024, said Defence Minister. The project which has reached a progress rate of 21.69% will be completed as scheduled to ensure that the welfare of Mindef staff, as well as Malaysian Armed Forces personnel and veterans, is protected. The project involves the construction of five residential blocks comprising 3,500 housing units.
GLORIA JEAN’S COFFEES AIMS TO COLLABORATE WITH MORE COOPERATIVES
The Edge, 21/01/2023
Perbadanan Nasional Bhd (Pernas), through its subsidiary Wonderful Lifestyle Sdn Bhd (WLSB), which is the master franchisee of the Gloria Jean’s Coffees brand, aims to collaborate with more cooperatives to open 10 new branches within five years. Gloria Jean’s Coffees recently expanded its network by opening a new branch in Menara Felda, Platinum Park KLCC. The opening was launched by Federal Land Development Authority (Felda) chairman Tan Sri Idris Jusoh. This 47th branch belongs to Felda’s cooperatives body called Koperasi Kakitangan Felda Malaysia Bhd (Felkop). The opening of the branch by Felkop is expected to be a benchmark for other cooperatives to explore opportunities to venture into and invest in the Gloria Jean’s Coffees franchise. Pernas also provides opportunities for potential entrepreneurs not only to individuals but also to cooperatives interested in becoming entrepreneurs by providing various forms of facilities such as advisory services, financing and training programmes to help them to start a business, especially in the field of franchising.
AL-IKHSAN PLANS TO OPEN 40 OUTLETS IN 2023
NST, 27/01/2023
Al-Ikhsan Sports Sdn Bhd planned to open up 40 stores in Peninsular Malaysia and is expanding to Sabah, Sarawak as well as regionally. The company will also be launching a new central warehouse for Al-Ikhsan Sports in 2023.
MQ TECH’S SUBSIDIARY TO ACQUIRE LAND IN MELAKA WORTH RM19.5 MILLION
The Star, 27/01/2023
MQ Technology Bhd’s (MQ Tech) wholly owned subsidiary, Star Acres Sdn Bhd (SASB), has entered into a conditional sale and purchase agreement with Cash Support Sdn Bhd (CSSB) to acquire part of leasehold land in Klebang, Melaka worth up to RM19.5 million. The 7.1 acres land is located approximately 10km northwest of the Melaka city centre. The company intended to undertake a property development of two blocks of 27-storey serviced suites with a total of 1,000 units and 80 units of shop lots. The estimated gross development value (GDV) and gross development cost (GDC) of the proposed development is approximately RM275 million and RM200 million, respectively, with an estimated gross development profit of RM75 million. The proposed development plans and ancillary applications are targeted to be submitted to the relevant authorities after the completion of the proposed acquisition, which is expected to be in 3Q23. The proposed development is expected to commence in 1Q25 and is expected to be completed within three years from the commencement date.
SEPANG DEVELOPMENT TO WELCOME RETAILER’S NEW CONCEPT STORE
The Star, 27/01/2023
Arena Xchange, the first freehold commercial development by IOI Properties Group Berhad in Warisan Puteri, Sepang, will welcome a first-of-its kind concept store by Lotus’s Malaysia in 2023. The supermarket chain will take up eight retail units totalling over 10,764 sq. ft. at the 49-unit Arena Xchange, which was sold out within four months of its launch in March 2022. The concept store will provide a wide range of offerings for the everyday needs of a growing and thriving community. Arena Xchange is positioned within the bustling township of Warisan Puteri and located within proximity to Kuala Lumpur International Airport, KLIA 2 and Salak Tinggi ERL station. Arena Xchange is intended to become an ideal commercial hub to complement IOIPG’s upcoming launch of Arena Residences, which comprises 866 units of freehold serviced apartments. Arena Residences will be launched in two phases, each with a gross development value of RM150 million.
MALVEST LAUNCHES ANOTHER DEVELOPMENT IN KELANTAN
The Edge, 23/01/2023
Malvest Group officially launched Arika @ Kubang Kerian on 12th January 2023, the company’s fifth development in Kelantan. This follows Malvest’s successful completion of Troika Kota Bharu, an award-winning high-rise development, in 2020. The “first fully furnished service residence in the vicinity” with 668 units of “various practical layouts available to promote a lively community”, Arika also has 26 commercial units. At 42 storeys, Arika is reported to be the tallest building in Kelantan when completed. The project offers a diverse range of 45 lifestyle facilities such as themed landscaped gardens, infinity pool, library, family karaoke, sky garden, badminton, mini futsal, sky picnic, family gourmet to name a few, that will redefine lifestyle of the residents. It will be located at Jalan Tok Kenali just less than 1km from Kubang Kerian City Center, USM Health Campus and Hospital USM. Coffee Bean & Tea Leaf has confirmed the opening of an outlet in Arika while a few prominent brands have also expressed their interest. The commercial component will offer lifestyle conveniences to the residents as well as supporting the population within the vicinity. The developer will also be providing service suites management. Arika has achieved a 70% booking rate upon launch.
REDUCING CONSTRUCTION COSTS WILL HELP MANAGE PROPERTY PRICE HIKES: REHDA
Starproperty.my, 25/01/2023
Prices of homes will be pushed up in 2023 by higher construction costs, stemming from rising raw material prices, labour shortage and compliance costs, among others. Real Estate and Housing Developers’ Association (Rehda) president denoted that it is not yet clear what will be the quantum of increase in property prices due to these factors. While the evidence certainly points to higher construction and development costs that will push prices up, it isn’t clear to what extent prices will continue to rise in 2023. This very much depends on each developer’s portfolio of projects, their outlook on inflation and the economy, and their ability to absorb some of the rising costs on behalf of the people. Construction cost accounts for 50% to 60% of the gross development value (GDV), according to the Housing Forward: Understanding Costs and Sustainable Prices research conducted by Rehda Institute. It also noted that there is hardly room to reduce the construction costs given the existing construction standards, quality requirements and materials prices. The report also found that compliance cost accounts for 22% to 32.5% of the GDV in township development and from 13% to 24.5% of the GDV in strata development. Compliance cost is defined as expenditure in conforming to government policies, legislation and regulation. The cost can also be time-based such as delays and uncertainty of approvals including at pre-, during- and post-development stages, which results in increased risks and holding costs.
BRINGING GROWTH TO THREE RURAL AREAS
The Star, 21/01/2023
The Johor Government has introduced three Special Area Draft Plans (RKK) for rural area development within the next 15 years. State housing and local Government committee chairman said the three RKKs were in Tangkak, Endau-Rompin and Sedili. The State Government together with the Town and Country Planning Department (PLAN Malaysia) has carried out research on the best way to develop these rural areas. The Economic Planning Unit (EPU) will help in getting the project implemented. After the review period, the plans will be tabled again along with suggestions and objections before they are presented to the State Planning Committee (SPC). The final decision will be made by community leaders, village chief, council president or district officer on which project is to be given priority. Each RKK focuses on the best development plan for the area. The Tangkak RKK involves developing the town and public transportation between Muar and Melaka. The Endau-Rompin RKK will focus on developing a biodiversity protection area called Asean Heritage Parks. In Sedili, the focus will be on developing the area’s ecotourism since 80% of locals are fishermen and Sedili was the second largest supplier of fish in Johor after Endau in Mersing.
STATE GOVERNMENT LOOKS AT NEW FLIGHT ROUTES FROM SENAI AIRPORT
The Star, 27/01/2023
The Johor Government is exploring the possibility of new flight routes from Senai International Airport to boost tourism in the State. Currently, the airport has 16 flight destinations – 12 domestic flights and four to Ho Chi Minh in Vietnam, Bangkok in Thailand as well as Jakarta and Surabaya in Indonesia. The State Government is studying new flight destinations. The Senai International Airport is also being upgraded with the addition of five new departure gates. Once the upgrade is completed, there will be nine departure gates at the airport to accommodate some five million passengers a year.
PLENITUDE TO LAUNCH IMPIAN HILLS SALES GALLERY IN JOHOR BAHRU
The Sun, 26/01/2023
Plenitude Bhd is set to launch its Impian Hills Sales Gallery in Johor Bahru and unveil the first phase of its Magnolia two-storey terrace homes. Impian Hills in Ulu Tiram is the latest freehold, low-density township by Plenitude Bhd. It is a 260-acre mixed-development township located just minutes away from the famed Taman Desa Tebrau. Impian Hills has been planned and designed for sustainable and harmonious community living and is easily accessible via Senai-Desaru Expressway, Pasir Gudang and Tebrau Highway. Magnolia is the first phase development in this new township, totalling 143 units of double-storey terrace houses.
PRICES OF AFFORDABLE HOMES TO SEE SLIGHT HIKE
The Star, 27/01/2023
The prices of certain Johor Affordable Housing (RMMJ) units will soon see a slight increase due to the rising cost of materials, says State housing and local Government committee chairman. The chorus of developers urging us to increase the prices of affordable houses has gotten louder since 2022, especially members of the Johor Real Estate Housing Developer Association (Rehda). Johor Rehda have expressed the challenges in constructing the houses at such a low price when the cost of building them has increased by between 30% and 40%. As such, the State housing and local Government have agreed to increase the prices for Types A and B RMMJ houses. The current cost of RM42,000 for Type A houses will be increased to RM50,000 while Type B homes currently priced at RM80,000 will be raised to RM100,000. For Type C houses, the price will remain at RM150,000 per unit.
PENANG’S PROPOSED SHORT-TERM RENTAL ACCOMMODATION GUIDELINES DETRIMENTAL TO TOURISM ECONOMY AND GROWTH, SAYS AIRBNB
The Edge & NST, 21/01/2023
Airbnb announced that it has shared “detailed feedback and policy recommendations” with the Penang Government’s executive committee in light of the state’s plan to regulate local short-term rental accommodation (STRA). Aimed at empowering local residents, these recommendations are focused on a balanced and simple approach towards regulating STRA, and are shaped by regulations that have been effectively adopted by global jurisdictions around the world, stated Airbnb in a media release. For strata buildings with commercial titles which are already zoned for commercial activities, Airbnb’s proposed recommendations call for STRA to be allowed by default in all strata buildings. For strata buildings with residential titles, building residents should be able to continue using the existing Strata Management Act 2013 (SMA 2013), to collectively decide with a 75% vote via their Joint Management Body (JMB) or management corporation if any conditions or restrictions around STRA should be implemented. Airbnb has also suggested introducing a simple and low-cost online authorisation portal to ensure the registration process for Hosts is straightforward and accessible. The current proposed guidelines by the Penang Government require an onerous process via which all Hosts must have registration with the Malaysian Companies Commission (SSM) and submit physical forms to apply for additional licenses from local authorities. More specific recommendations by Airbnb include:
*Doing away with a suggestion on cap on booking nights, as this severely limits guest travel and undermines ongoing efforts to promote Penang and Malaysia as a preferred Digital Nomad Hub. The Penang Government is currently looking to implement a 180-night cap, and a three-day per week guest occupancy limit.
*Allowing all tax-paying residents in Malaysia to engage in short-term rental and maximise the economic benefits from the home sharing economy. The State Government is proposing that short-term rental can only be conducted by Malaysians, and registration with the Malaysian Companies Commission (SSM).
Airbnb strongly believes that as tourism gradually recovers, STRA and Airbnb’s community of Hosts and guests will be a key driver for Penang’s tourism industry, and more broadly the Malaysian economy. The current guidelines proposed by the Penang Government in July 2022 pose severe constraints on domestic and international travel to Penang; and will be detrimental to the state’s tourism industry and long-term economic growth. Robust regulations that address key issues while appropriately recognising and embracing STRA as part of the tourism industry will go a long way to help Malaysia capitalise on the benefits of home sharing, as the country gradually recovers from the impact of the Covid-19 pandemic and the current property overhang. Airbnb has previously urged Putrajaya to consider and support a national regulatory framework to ensure that STRA rules are uniform across the country. A national system would reduce the administrative burden on Hosts and state authorities and encourage compliance with the STRA legislation.
NEW PEDESTRIAN BRIDGE FOR SUNGAI ARA IN PLANNING STAGE
The Star, 26/01/2023
The construction of an aesthetically designed pedestrian bridge across a stream in Sungai Ara, Penang, will begin after Chinese New Year. The existing pedestrian access in the neighbourhood – an old, utilitarian bridge – will be demolished to make way for a new one. The new bridge will be built artistically and creatively to serve not only as a crossing, but also as a sight to behold.
PENANG HOPES INFRASTRUCTURE PROJECTS WILL BE APPROVED UNDER BUDGET 2023
The Edge, 27/01/2023
Penang hopes the Federal Government will approve infrastructure projects which will make a positive impact on the state and the northern region in the re-tabling of Budget 2023 on 24th February 2023. These included the Light Rail Transit (LRT) project for the George Town-Butterworth line which was submitted to the Federal Government at the end of 2022. In addition, several state and federal agencies including the Northern Corridor Implementation Authority (NCIA) have also submitted projects for consideration. Among the priority projects that have been submitted by the NCIA were the new expressway and the elevated highway from Juru to Sungai Dua. These two projects must be given priority as a solution to the increasing and alarming traffic congestion that is happening now. Perhaps not all the projects will be approved but the State Government hopes that priority will be given to projects that will be beneficial to the northern region and Penang.
BERTAM THEME PARK SET TO MAKE A SPLASH
The Star, 21/01/2023
Bertam Souk & Water Park is Penang’s latest theme park located in Bertam, Kepala Batas. Owned and managed by Maritime Water Front Suites Sdn Bhd, it is the area’s pride and joy, being the first major tourist attraction in the area. It reopened on 7th January 2023, after a temporary closure. Now, families from all over the country can look forward to fun water activities at the park. It has more than 14 exhilarating fun rides, with the Voyager, Blue Lagoon and Rush Racer being the most popular and thrilling fun ride. To commemorate the highly anticipated re-opening of the water theme park, tickets are now on promotion rates until 31st March 2023. They are available from RM38.50+ for children and RM58.80+ for adults. For convenience, the public can purchase the tickets both online and offline. Maritime Water Front Suites Sdn Bhd has also built “Bertam Resort” on a 20-acre plot within the town, three years ago. Dubbed an “Oasis of Muse and Luxury”, this luxurious five-star Moroccan-themed resort offers over 256 rooms, 16 villas, and 29 suites catered to holidaymakers, honeymooners, family with children, and business travellers.