Zerin Properties chief executive officer Previndran Singhe said the country’s hotels and resorts will soon be experiencing new trends that have been taking place on the international front.
Previndran: Hotels and resorts will soon be experiencing new trends
“For example, limited service and branded budget hotels [like the Tune brand] are very popular overseas and these are managed by well-known hotel brands including Holiday Inn and Marriott.
Serviced apartments are also another type of limited-service offering,” he stated. Previndran was presenting his paper on the hotel and resort market performance for 2007 and the outlook for 2008 at the recently concluded First Malaysian Property Summit 2008 in Kuala Lumpur.
Other trends that would benefit the local hospitality sector include spa resorts and Syariah compliant hotels. “Foreigners will enjoy the spa-themed resorts, which are considerably more affordable here.
There is also a big market for ethnic-based hotels with Islamic architecture here and in the Middle East, there are about 26 Syariah compliant hotels,” he added. According to data from Zerin Properties, foreign investments in hotels grew by 64% to RM878 million in 2006, while the total investments by locals only amounted to RM153 million. Last year, 62% of the total value of hotel transactions, which amounted to RM756 million, was by foreigners.
Hotel funds as well as foreign investment funds, said Previndran, are the main drivers of demand for properties here. “While Malaysia is still perceived as a value-for-money destination, the growth in our tourism market is also driven by low-cost carriers like AirAsia. So allowing the open-sky policy will actually be beneficial to us.”
Some 20.7 million tourist arrivals were recorded in 2007 and tourism receipts amounted to RM45.7 billion, which is the second largest foreign exchange earner for the country.
The property summit was organised by the Association of Valuers & Property Consultants in Private Practice Malaysia and more than 100 participants attended the one-day seminar.
On the office market segment, CH Williams Talhar & Wong Sdn Bhd managing director Goh Tian Sui said that the segment’s benchmark selling price would be boosted to a new level above that
of RM1,230 psf recorded by the upcoming Menara YNH along Jalan Sultan Ismail.
Goh: The benchmark selling price would be boosted to a new level
In his paper on the office market’s performance for 2007 and outlook for 2008, Goh said capital values would be “quite bullish” and foreign buyers’ enthusiasm in Malaysia in the sector would continue to grow.
“Interest from foreign investors and institutions continue to remain strong… it depends on how much yield they can accept. But we are facing more competition from Singapore, Australia and the Middle East,” said Goh.
For the investment and retail market’s performance for 2007 and outlook for 2008, executive chairman of Regroup Associates Christopher Boyd feels confident that the rental rates in shopping centers in the Klang Valley have the potential to reach RM100 psf.
Boyd: Klang Valley shopping centers rental rates could reach RM100 psf
“This is likely to happen over the next three years because of the continuous growth of new retail space in the market.
Top rentals in the Klang Valley are about RM80 psf at Suria KLCC while the recently opened Pavilion KL is already charging as much as RM45 psf and has the potential of catching up quickly,” said Boyd.
On retail space transactions, Boyd expects that prices will surpass the RM1,500 psf mark from the current RM1,100 psf following growing demand from foreign buyers.
“Buyers outnumber sellers here by a very large margin and in the last two years, we have experienced investor interest from Europe, Australia, Singapore. Hong Kong and the Middle East,” he added.
By theSun (by Loo Pik Kwan)
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