3 Trends Driving Commercial Real Estate In Malaysia 2022

As the 2 years mark of the pandemic’s hold on Malaysia, more signs of promise are breaking through uncertainty — particularly in commercial real estate.

While these circumstances are anything but certain, the current conditions appear favorable: Historically, commercial real estate has provided a hedge against inflation and investors are expressing interest in diversifying through real estate.

For investors who getting ready to invest, here are some significant trends to check out:

For investors who getting ready to invest, here are some significant trends to check out:

1. Offices will change, but they won’t shutter

While the office market contends with its highest vacancy in recent decades, investors can expect to see occupancy and rent rate will stabilize this year. Why?

As after 2 years of working from home (WFH), companies or employers are eager to get 100% employees back to the office.

Although employees don’t understand when – or why – to go to the office... But the evolution of hybrid work and employee preferences has changed and begun to push employers to larger and cost-effective locations.

2. More investors will invest in commercial real estate

We saw more quantitative firms enter commercial real estate with the intent to deploy AI and machine learning in their investments in 2021.

This year, more investors are likely to enter the market because Malaysia government highlighted Budget 2022 that are related to the real estate industry:

• Landlords who provide rental discounts to businesses will be granted tax relief

• The real property gains tax (RPGT) will not be applied for properties sold after the 6th year

3. Construction costs will rise, benefiting existing assets

Over the past year, a combination of labor shortages, supply chain disruption and economic growth pushed inflation to its highest rate in decades.

The impact on new construction projects is - construction materials price will increase, hence, the construction costs also boost up.

As a result, replacement costs should continue to rise and existing assets will likely benefit from demand shifting in their favor.

Importantly, investors who tend to enter the market now will get the most benefits. We predict next year will continue to increase the construction costs, loan interest rate and property prices will boost up again.

If you wish to enter the commercial market now, do click the button below.