Malaysia An International Real Estate Investment Destination Hospitality Real Estate and Resort Homes

Transcription

1 Malaysia An International Real Estate Investment Destination Hospitality Real Estate and Resort Homes

2 Trend Of Hospitality Investments Malaysia Last year, a whooping 85% of the value of hotels transactions were by Foreigners, as compared to 44% for I see this increasing investments in hospitality markets as a growing trend The Same applies for Equity Investments in Real Estate. Capital Group of California bought 5.2% of E&O Properties, Mercury Real Estate has small interest in SP Setia and Selangor Properties Foreign Investments In Hotels Grew By 64% in Hotel Funds and Foreign Investment Funds Driving Demand Local Foreign Zerin Properties Corporate Real Estate Services

3 Hotel Transactions 2005 Hotel Location No of rooms Transaction Price Price per Room Mandarin Oriental KLCC 643 RM 600 mil RM933,000 Sheraton Perdana Langkawi 207 RM 77.5mil RM374,396 Merlin Inn Cameron Highlands 66 RM 13.5 mil RM204,545 Merlin Johor Bahru Johor Bahru 149 RM mil RM70,201 Sheraton Kuantan Kuantan 267 RM 36.6 mil RM137,078 Sheraton Imperial Sultan Ismail 398 RM 225 mil RM565,000 Nikko Hotel Jalan Ampang 470 RM235 mil RM500,000

4 Hotel Transactions 2006 Hotel Location No of Rooms Transaction Price Price per room Ferringhi Beach Hotel Penang 350 RM43 mil RM122,857 Holiday Villa Langkawi 258 RM55 mil RM213,178 Holiday Villa Kedah 160 RM31 mil RM193,750 Holiday Villa Kuantan 100 RM21.87 mil RM195,286 Midtown Hotel Penang 96 RM12 mil RM125,000 Crown Princess Jln Ampang 571 RM240 mil RM420,315 Westin Bukit Bintang 452 RM455 mil RM1mil Sheraton Subang Subang Jaya 502 RM140 mil RM278,884 Berjaya Palace Hotel Sabah 160 RM21 mil RM131,250 Grand Centerpoint Kuala Lumpur 100 RM12.5 mil RM125,000

5 Ownership Details as of Dec and 5 Star Hotel Sector Kuala Lumpur Local 58% Local 58% Foreign Foreign 42% Both Foreign and Local Funds will drive commercial real estate market in next two years Zerin Properties Corporate Real Estate Services

6 The Advent Of Resort Homes Westin Langkawi Kudat Riveria Karambunai Resort At least 3 More In Langkawi Kuala Terengganu Kuantan Kota Kinabalu/Tuaran/Papar

7 Market Influencers Economic Performance 9MP IDR Singapore s IR Low Cost Carriers Tourism Juggernaut REIT, Private Wealth, Funds Liberisation of Financial Markets Arbitrage with Jakarta, Bangkok and Singapore English Speaking Multi-Racial

8 Real Estate Transparency Index 2006 Hong Kong Singapore Malaysia Rating Tier Malaysia is also one of the most Real Estate Transparent countries in the world ranking in Tier 2 with Japan (both ranked 22 and 23 respectively) as compared to China and Vietnam at Tier 4 (ranked 42 and 56 respectively) Japan 23 2 Thailand 36 3 India 41 3 China 42 4 Vietnam 56 4 Source: JLL

9 Investor Demand For Commercial Real Estate The RICS Global Property Survey provides unique insight into commercial property occupancy and investment trends in cities around the world. The survey, published twice a year, has nearly 400 contributors from both global property companies and local property professionals. The Survey Resulted in KL being sought after by REITS and Investment Funds, causing Yields to drop as prices increase due to demand RICS Global Survey

10 Investors Key Considerations Sovereign Political Stability Strong Economy Growth Story Business Friendly Atmosphere Supportive Government Legislations & Policies Less red tape Faster Approvals Cheaper Cost To Entry Movement of Funds Faster Time To Register Business and Transfer Real Estate

11 Investors Key Considerations Property Market Legislated Market ownership, tenancies etc Capital Upside Secured Rental Income Good Infrastructure Accurate & Consistent Information Ethical Business Standards Secure Financial Markets

12 Quality Of Life Index The Driving Force of Private Wealth Hong Kong Singapore Malaysia Japan Thailand India China Vietnam Rating NA The future financial markets will be Private Wealth and Private Equity, and Malaysia needs to position itself to attract such funds Economist.com

13 Enhancing Malaysia s Attractiveness & Encouraging Increase in Foreign Investment Public Relations The Superb Real Estate Laws Red Carpet No Concerted Effort OHQ, Tax Breaks, Preferred Industries, MITI, Actual Quality of Life Index, Real Estate Transparency Index Malaysia As The Preferred Destination Perceived Racial Tension Right Time To Go as Neighbors Candles Not So Bright Depth In The Market Not Enough Investment Grade - Opportunity Difficult To Get Information - Perceived Quality Of Life Index Private Wealth and Private Equity Liberalizing Financial Sector Fund Origination & Fund Management GLCs to Drive The Market REITs, ABS and other Financial Instruments Changing Of Land Law/Leasing Laws Human Capital Cost Of Entry, Time To Set Up Business etc Succinct FIC Guidelines For Real Estate and Hospitality Transparent Creating An Easy Entry Comments Based On Interviews With Foreign Real Estate Funds Based in Singapore, UK, Dubai, HK

14 Applying Blue Ocean Strategy that tomorrow s leading projects will succeed not by battling competitors, but by creating blue oceans of uncontested market space ripe for growth. Such strategic moves termed value innovation create powerful leaps in value for both the project and its buyers, rendering rivals obsolete and unleashing new demand Eliminate Un-structured Marketing Activities Ambiguity of Investment Issues Capital controls Foreign Ownership FIC Create Succinct Communications International Profile Incentives Brand Malaysia Fast Track Approvals Raise Fact That We Are Foreign Ownership Friendly Target Market Presence Quality of Products Quality of Service Public Relations Fund Managers and Private Wealth Red Tape State Approvals Reduce

15 Which Is The Way To Go? KLCC, Penang, Johor Bahru Langkawi Penang Kuantan KK, KT,KB Hospitality High End Business/Mid Limited Svc Product Led Functional Discerning Hotels Serviced Apts Resorts