Some RM10 billion worth of Malaysian prime commercial real estate here involving institutional buyers have been put on the market in the last 18 months, The Edge Malaysia business and investment weekly (Edge Weekly) reported in its latest June 1-7 issue.
Edge Weekly reported that the weaker ringgit made these properties, comprising land and office towers, more attractive in the world market. Cash-rich corporate buyers and government-linked funds here were also seen generating demand for these assets.
"To show how active corporate and institutional buyers have been, over RM6.7 billion worth of transactions involving land and commercial buildings, excluding three Tun Razak Exchange deals worth at least RM2.7 billion, have been either completed or executed since early last year, according to a compilation by The Edge.
"Meanwhile, another RM3.5 billion worth of commercial buildings in downtown KL have been put on the market," Edge Weekly said.
Property consultants told Edge Weekly the weaker ringgit had placed Malaysian commercial properties under the global spotlight.
Zerin Properties CEO Previndran Singhe described the last 18 months as "very vibrant" for commercial real estate here. Such backdrop was last seen about 10 years ago, according to Previndran.
The sudden surge in interest could be due to the Malaysian market looking attractive to investors. This is mainly due to the US dollar strengthening against the ringgit and the still strong fundamentals of our property market, he said.
Bloomberg data showed that over the last six months, the ringgit weakened to 3.6675 versus the US dollar yesterday from its strongest point at 3.3828 on December 1, 2014. Compared to the Singapore dollar, the ringgit depreciated to 2.7201 yesterday from its firmest level at 2.5933 on December 1, 2014.
The ringgit weakened in tandem with lower prices of crude oil, which forms a crucial portion of the Malaysian economy. The ringgit also depreciated against a firmer US dollar in anticipation of US interest rate hikes this year.
For a better understanding on Malaysian real estate dynamics, kindly pick up and read the latest issue of Edge Weekly. – May 30, 2015.