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  • MANAGER’S DISCUSSION AND ANALYSIS

    property market overview 2018

    MARKET INDICATIONS

     

    Malaysia’s economy recorded sustained growth of 4.4% during 3Q2018 (2Q2018:4.5%), mainly driven by expansion in domestic demand and higher private investment. The country’s gross domestic product (GDP) for the whole year of 2018 is expected to be in the region of 4.8%.

     

    The Business Conditions Index (BCI) slipped 7.5 points to 108.8 points in 3Q2018, from 116.3 points registered in the second quarter. This suggests that business trends continued to expand albeit at slower pace.

     

    The labour market conditions continued to remain favourable with unemployment rate at 3.4% in 3Q2018 (2Q2018: 3.3%).

     

    Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) unchanged at 3.25% to remain accommodative and supportive of current economic activity.

     

    The country’s total trade for the period from January to October 2018 was valued at RM1.56 trillion. For the first time, exports breached the RM90 billion mark in October to hit a record high of RM96.38 billion with China remaining as the top export destination. On a y-o-y basis, exports and imports grew 7.5% and 5.4% to RM829.89 billion and RM727.88 billion respectively.

     

    Malaysia’s industrial production index (IPI) was 4.2% higher year-on-year (y-o-y) in October 2018, supported mainly by higher output in the manufacturing and electricity sectors.

     

    The Nikkei Malaysia Manufacturing Purchasing Managers Index (PMI), a measure of business conditions in the country’s manufacturing sector, hit 46.8 in December, down from 48.2 in November, the lowest level since July 2012 as a result of general market slowdown due to lower orders and higher operating expenses. Readings above 50 indicate an expansion while those below 50 indicate contraction.

  • Illustration of Industrial Usage

        Industrial Automation     Port Management    Heavy Industrial     Open Yard Storage       Air Freight Cargo     Road Transport Freight     Sea Cargo     Freight Train with Cargo Containers  

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  • Industrial Sector Overview

    The services and manufacturing sectors have consistently remained as the key engine to the country’s growth. From 2016 to September 2018, contribution from the manufacturing sector has been fairly consistent at circa 23.0% of the country’s total GDP (at current prices).

     

    Malaysia: Manufacturing Sector - Percentage Contribution to Total GDP (at constant 2010 prices), 2016 to Jan-Sept 2018

     

    The manufacturing sector continues to be an important part of Malaysia’s industrialisation efforts, attracting both local and foreign investments. From January to September of 2018, the sector saw the approval of 468 projects with total investment of RM59,070.4 million (circa 42.4% of the country’s total investments) and the creation of some 41,033 job opportunities.

     

    Foreign investments formed the bulk of total investments with about 82.6% share (or RM48,764.4 million) with the remaining RM10,306.0 million or 17.4% coming from domestic investments. Some 59.8% of the foreign investments in the manufacturing sector were from Asian countries such as China, Indonesia, Republic of Korea and Japan whilst investments from the Netherlands, the United States and British Virgin Islands collectively made up circa 29.0% share.

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  • Manufacturing Sector: Investment Overview, 2016 to Jan-Sept 2018

    Three industries accounted for about 62.8% of the total approved investments, with petroleum products (including petrochemicals) topping the list with investments of RM20,413.5 million, followed by electrical and electronic products (RM10,652.3 million) and basic metal products (RM6,056.4 million).

     

    By state, Johor topped the list with RM26,526.6 million or 44.9% share of total investments in the manufacturing sector, followed by Pahang with RM8,975.5 million (15.2%), Selangor (RM8,246.9 million or 14.0%), Terengganu (RM4,283.5 million or 7.3%) and Penang (RM3,825.2 million or 6.5%).

  • Industrial Market - Johor

    During the first three quarters of 2018, statistics from Malaysia Investment Development Authority (MIDA) showed that Johor approved 91 manufacturing projects with total capital investment of RM26,526.6 million

     

     

     

    A number of new manufacturing plants and expansion plans were unveiled in the state during the year.

    •  Knauf Insulation is to build a RM569 million plant in Malaysia to meet soaring demand for its Mineral Wool insulation solutions across the Asia Pacific region. The new plant, which will be located in Johor Bahru, will have a capacity of 75,000 tonnes a year. The plant is scheduled to be completed in early 2020 and will create 180 jobs in Malaysia as well as 60 new positions across the region. 
    • Technology-based LEAF group, through Leaf Malaysia OpCo Sdn Bhd, is set to invest up to RM600 million in a factory on 8.09 hectares of land in Pelabuhan Darat, Segamat. The factory that will cater towards the biotechnology procession and green technology segments will be fully completed in 2021. The investment is expected to create 60 new employment opportunities.
    • Norman Process Oils Malaysia Plant Sdn Bhd, a subsidiary of Orgkhim Biochemical Holding from Russia, is building a US$50 million (RM197.84 million) facility at Tanjung Langsat, Pasir Gudang to manufacture petroleum-based extender oils used in tires, synthetic rubbers and rubber compounds. The Malaysian facility will supply markets in the Asia Pacific region with a particular focus on China as well as other established markets including Malaysia and Singapore. 
    • Synthomer, a world leader in the manufacture and supply of nitrile latex, has opened its latest phase of nitrite latex expansion at its facility in Pasir Gudang. The company has had a presence in Malaysia approaching 100 years and now employs more than 700 people across four manufacturing facilities in Johor and at its Asia Pacific Regional Headquarters in Kuala Lumpur. Synthomer has invested more than RM1 billion in the last 15 years and the latest expansion sees a further investment of RM270 million. 
    • Chemical Company of Malaysia Bhd is investing RM68.5 million to increase the output of chlor-alkali products at its plant in Pasir Gudang, Johor.

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  • Projects

    A selection of editorials I've worked on

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  • Industrial Market - Johor: Overview

    The industrial property sub-sector in Johor was more active in 2017, recording higher volume of transactions compared to the previous year. A total of 799 transactions valued at RM1,895.63 million changed hands in 2017 (2016: 730 transactions worth RM2,026.79 million). The value of transactions was, however, 6.5% lower despite higher transacted volume (9.5%) in the sub-sector and this indicates that lower valued industrial properties were transacted during the period.

     

     

    For the January to September 2018 period, there were 585 property transactions in the industrial subsector with corresponding value of RM1,445.30 million. The composition of transactions were made up of 172 units categorised under ‘others’ (29.4% share), followed by the terraced (26.8%), semi-detached (25.5%) and detached (18.3%) categories. In terms of transacted value, the detached category topped with RM617.94 million (42.8%), followed by others (29.4%), and the semi-detached (20.6%) and terraced (7.2%) categories respectively.

  • Industrial Market - Johor

    Supply: Existing and Future

    The cumulative existing supply of industrial properties in Johor stood at 16,644 units as of 3Q2018. There was an increase of 401 units from 2017, made up of 212 cluster units, 88 terraced units, 70 semi-detached units, 30 detached units and an industrial complex respectively.

     

    The terraced category continues to dominate existing supply with circa 46.8% market share, followed by the semi-detached and detached categories with 24.9% and 22.5% share respectively. The majority of terraced factories in Johor are located in Johor Bahru District (4,976 units).

     

    As for incoming supply, the semi-detached and cluster categories dominate with 706 units (37.7%) and 560 units (29.9%) respectively. The bulk of these supply (semi-detached and cluster categories) come from Johor Bahru District with 486 units and 528 units respectively.

    Meanwhile, there are a total of 974 industrial units currently under planning stage, with some 37.4% comprising semi-detached units. Future supply of detached and terraced factories, account for 31.4% and 22.1% share respectively.

    The bulk of planned supply will come from Johor Bahru District (61.2%), followed by Batu Pahat District (16.1%), Segamat District (7.2%) and Pontian District (6.5%).

    Rental Values

    In Johor, the average asking rentals for industrial premises in selected established industrial areas generally stable compared to the preceding year. Industrial premises in Senai command higher asking rents in the region of RM1.20 per sq. ft. to RM1.60 per sq. ft. per month when compared to those located in the Pasir Gudang, which range from RM0.80 per sq. ft. to RM1.30 per sq. ft. per month. In the Port of Tanjung Pelepas, asking monthly rentals for warehouses are in the region of RM2.20 per sq. ft.

     

  • Industrial Market - Johor

    Capital Values

     

     

    Rental Values

    In Johor, the average asking rentals for industrial premises in selected established industrial areas generally stable compared to the preceding year. Industrial premises in Senai command higher asking rents in the region of RM1.20 per sq. ft. to RM1.60 per sq. ft. per month when compared to those located in the Pasir Gudang, which range from RM0.80 per sq. ft. to RM1.30 per sq. ft. per month. In the Port of Tanjung Pelepas, asking monthly rentals for warehouses are in the region of RM2.20 per sq. ft.

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