Budget 2017 to see a tight lid on expenses
Budget 2017 will see the government keeping a tight lid on expenses, at the same time addressing pressing issues such as increasing disposable income and making housing more affordable for the young working population. The Budget is also expected to set the pace for Malaysia to prepare for a growing ageing society, with over 45% population above 60 years old by 2025. A major focus of the Budget will be raising disposable income and encouraging upscaling, reskilling and entrepreneurship training. It will also touch on mitigating the rising cost of living, providing more affordable housing, substantial measures on education and allocations for the provision of quality healthcare services. (The Star Online)
EPF negotiating for RM1.28bil loan to refinance UK assets
The Employees Provident Fund (EPF) is seeking a RM1.28 billion loan to refinance its assets in the UK to help protect against volatilities in foreign currency and exchange rates. The fund said in a statement that offshore financing reduced the foreign currency exposure of the global real estate investment and, therefore, was part of investment best practice. Bloomberg reported last month that EPF has a UK property portfolio worth more than £2bil (RM10.2bil). However, EPF CEO Datuk Shahril Ridza Ridzuan had said the fund’s exposure to UK properties was small at between 1% and 1.5% of its overseas portfolio. Among EPF’s high-profile exposure to the UK market is its 20% interest in the Battersea Power Station redevelopment in London. (The Star Online)
Commercial and office space not facing glut despite slow take-up
Commercial and officespace in the country is not facing a glut, even though take-up rate has been slow over the past few years, said MIEA past president Siva Shanker. Traditionally, the occupancy rate has always been on the high 80s but has now come down to the low 80s. Henry Butcher Malaysia CEO Tang Chee Meng said supply of commercial and office space was short due to the financial crisis a few year ago, but after the recovery, developers started looking into building office buildings. The next few years will be a tenants’ market while owners and investors may experience stiff competition in retaining tenants or leasing out new space. (New Straits Times Online)
Industrial property sector remains stable
Industrial properties may not be as interesting as housing and commercial properties, but the sector remains durable and can withstand all kinds of market conditions. Industrial properties, typically buildings for manufacturing or warehouse purposes, have always been on the back-burner, but the sector is strong and has a steady growth momentum. It was noted that while some industries are struggling with cash flows, very few industrial property owners are closing down their business, as they are ‘big-ticket’ items. According to CH Williams, Talhar & Wong (WTW) Property Report 2016, the supply of industrial properties remained unchanged in the third quarter of last year, and the average rental rates in selected industrial areas remained firm. Incoming supply was concentrated in Klang, with more developers looking to develop industrial estate in the Klang Valley. (New Straits Times Online)
Pelaburan Hartanah plans first asset sale
Real estate investment company Pelaburan Hartanah Bhd (PHB), which has commercial assets and land worth over RM5 billion, is planning to dispose close to 790 acres of land it owns in Ulu Bernam, Selangor. The value of the land, located 18km south of Proton City in Tanjung Malim, is estimated to be around RM6 psf, which could translate into a sale of about RM206 million. The tract comprises of seven contiguous parcels. According to documents, a portion of the tract has been designated as “residential”. The bulk of the land, however, is for agricultural use. Nevertheless, PHB has submitted an application to the Hulu Selangor District Council to rezone the entire site to a mix of industrial, commercial, institutional and residential. (The Edge Markets)
Black sludge caused by oil pollution from illegal recycling centres (Photo from The Star)
MPSJ to shut down illegal scrapyards
Several structures of illegal recycling centres in Kampung Bukit Lanchong, Subang Jaya will be demolished for polluting a drain leading up to Sungai Klang. Oil trails from the lots collecting reusable spare parts and wires were seen leading into the drain. Residents in the area had complained about the contamination a week ago, as well as in the past. The illegal businesses have been running for over five years and are infamous in the area for carrying out open burning activities at night. The demolition will be carried out within 30 days as the recyling centres had not obtained licence from MPSJ. (The Star Online)
