Malaysia Property Inc targets RM20b sales in 10 years

PETALING JAYA: Malaysia Property Incorporated (MPI), a private sector-government initiative to attract foreign direct investments into the local property market, targets RM20 billion in total sales of local real estate in the next 10 years.

"In 2008, foreigners purchased RM200 million worth of properties in the country. Our objective of RM20 billion, or RM2 billion a year, is quite significant," MPI chairman Datuk Richard Fong said on July 24.

"Every year, we sell about 120,000 new houses and only 2.5% are foreign purchasers. Singapore, on the other hand, sells about 22% of its properties per year to foreigners," he said after the official launch of MPI. Target markets include the UK, Middle East, India, Bangladesh, Pakistan, Japan, Korea, Hong Kong, Singapore and Indonesia.

Fong says there is a general misconception among foreigners about investing in Malaysia.

"In fact, we have more friendly property laws compared to some other countries in Southeast Asia," he adds. For example, foreigners can only purchase condominium units in Singapore, not landed properties.

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop, who officiated the launch, said 77% of foreign visitors to Malaysia were keen to buy properties in Malaysia, and out of this percentage, 60% were interested to buy their second property here.

Speaking to reporters after the launch, he said there was a significant global liquidity currently in search of investments despite the global economy crisis.

"We should leverage on Malaysia's natural linkages to countries such as China and Singapore, offer quality and value-for-money properties. We want Malaysia to be the preferred destination for foreigners to work, live and play," he adds.

He cited high-rise residential properties in Kuala Lumpur city centre selling at an average US$600 psf to be modest compared to prices in countries such as Hong Kong and Singapore where similar properties are at an average US$2,000 psf.

MPI, a non-profit company wholly owned and funded by the government, was allocated a RM25 million starting grant. While MPI is still at its infancy, Fong said the private sector planned to match the government's grant. Since MPI started operations in December 2008, it had held road shows and exhibitions in Japan, Singapore and the UK.

By The EDGE Malaysia (by Rosalynn Poh)