PETALING JAYA: Despite the depreciating ringgit against the US dollar in the first quarter of 2015 (1Q15) and ongoing concern about the impact of low oil prices on the  economy, the level of investment activity remained surprisingly strong for the quarter, according to DTZ Research’s Property Times Kuala Lumpur 1Q2015 titled Cautious Sentiment Aggravates Uncertainties.

The report, however, noted that the rest of the year could see more uncertainty with greater challenges  to close the gap between asking prices and expected yields from investors, and also potential implications for investment sentiment given the current discourse on hudud legislation.

Maintaining momentum from the previous quarter that recorded RM1.7 billion, the total investment sales volume in Malaysia for 1Q15 was estimated at RM1.6 billion.

Nine transactions were recorded for the quarter, with major deals including the long-delayed Bukit Bintang City Centre project in Jalan Pudu/Jalan Hang Tuah that has started with a new joint-venture agreement between UDA Holdings Bhd (the original developer) with EcoWorld Development Group Bhd and the Employees Provident Fund Board.

Another major transaction reflecting the strength of the market is the sale of the French embassy site in Jalan Ampang, Kuala Lumpur that has been successfully signed off at a still undisclosed price, the report said. (The site has since been sold to Putrajaya Ventures Sdn Bhd, a subsidiary of Putrajaya Holdings Sdn Bhd).

Meanwhile, other significant deals include Tropicana Mall and Office (RM540 million) that was sold to CapitaMall Malaysia Trust,  Subang Avenue Shopping Centre for RM139.5 million, Doubletree by Hilton at The Intermark for RM388 million, and The Integra Tower sale, which was reported in 4Q14 to have been signed off at RM1.07 billion or a record of RM1,400 per sq ft, reflecting a net yield of 6%.

The report did state, however, that investors are becoming increasingly cautious owing to the depreciating ringgit and the introduction of the goods and services tax that took effect in April. — theedgeproperty.com

This article first appeared in The Edge Financial Daily, on May 20, 2015.