PETALING JAYA: Mainland Chinese investors are now favouring Malaysia for real estate over more expensive Australia and Hong Kong, says the Financial Times (FT) in a report.
Chinese developers have increasingly made their presence felt especially in the southern tip of the Malay Peninsula where since the early 2010s, a number of them have bought land in Iskandar Malaysia, the country’s most established economic zone located in Johor.
One of the earliest, Guangzhou-based Country Garden Holdings Co Ltd, bought 57 acres in Danga Bay, a planned waterfront city, from Iskandar Waterfront Holdings Sdn Bhd (IWH) for RM57mil in 2012. The company launched 9,000 units of condominiums in 2013 that will be completed over several phases. The RM18bil project will also include a mall and a bouvelard. IWH, Danga Bay’s master developer, counts Tan Sri Lim Kang Hoo and Kumpulan Prasarana Rakyat Johor, the state investment arm, as shareholders.
According to FT, citing data from Real Capital Analytics, Chinese groups have invested more than US$2.1bil in Malaysian real estate over the past three years, compared with US$985mil invested by Singaporean companies between 2014 and 2016. These investments complement the other investments that Khazanah Nasional Bhd, Malaysia’s sovereign wealth fund, have drawn to Iskandar Malaysia. Singapore’s Temasek Holdings Pte Ltd and CapitaLand Ltd have projects in Iskandar Malaysia as well as Sydney-based Walker Group Holdings Pty Ltd.
Last year, the economic zone drew in investments totalling RM32.15bil. From 2006 up until last year, Iskandar Malaysia has seen RM222.44bil of investments, of which RM119.5bil or 54% has been realised.
Besides the Danga Bay project, Country Garden has embarked on an ambitious US$100bil project spanning 30 years called Forest City, which will be built on four artificial islands just across from Singapore. Other prominent Chinese companies who have invested in Iskandar Malaysia include Guangzhou-based R&F Properties Co Ltd and Shanghai-based state developer Greenland Holdings Group Ltd.
Many reports have noted that the Chinese who have flocked to Malaysia to buy homes especially in Johor have been attracted to the competitive property prices and the nearby amenities of Singapore while Chinese developers, facing stiffer competition and a saturated market, have been buying up real estate comprising both land and properties abroad, as part of strategies to diversify geographically.