KUALA LUMPUR (Jan 27): Despite the disruption to the property market recovery that was expected in 2021, real estate consultancy firm Rahim & Co International Sdn Bhd deemed that the overall performance has been stable and expects the segment to recover gradually. 

During the media launch on Thursday (Jan 27) of Rahim & Co’s Property Market Review 2021/2022 report, its executive chairman Tan Sri Abdul Rahim Abdul Rahman said the market has shown a glimpse of improvement in between the national lockdowns in 2021.

“The [property market] recovery expected in 2021 was disrupted due to the resurgence of Covid-19 cases and though the first six months of 2021 did improve significantly, third quarter performance caused a slight pull back which ultimately ended with a more muted nine-month transaction performance.

“However, thanks to the government’s stimulus measures, the property sector’s performance has been stable. Nevertheless, the anticipated property market recovery to pre-Covid levels will require more time than initially expected,” Abdul Rahim said in his welcome speech.

He added that the firm is cautiously optimistic on the outlook for 2022 while expecting the market to show gradual recovery as the country has achieved a high vaccination coverage, coupled with continued government support, accommodative policies and phased openings of international borders.

According to the report, Malaysia’s property market saw a significant rebound of transactions in 1H2021 before the Full Movement Control Order in 3Q2021.

“However, the overall nine-month performance still recorded a commendable total transaction value of RM98 billion, a notable increase of 21.4% in value year-on-year, but a slight drop of 1.8% in volume,” Rahim & Co’s director of research Sulaiman Saheh shared during his presentation of report.

He attributed the performance to the pent-up demand effect and deferred transactional formalisations from previous quarters that had been delayed, as well as the accommodative policies by the government, such as the extension of the Home Ownership Campaign, Real Property Gains Tax (RPGT) exemption and other initiatives provided under Budget 2022.

Sulaiman also highlighted that challenges in commercial property tenancy performance and rental levels are likely to carry on into 2022 as incoming supply continues despite demand still being shaken up by the pandemic.

“For example, the purpose-built office space in the Klang Valley has seen its supply surpass 150 million sq ft in total of existing office space with more completion of new buildings in the short future. This has heightened the level of concern felt on the sustainability of such market capacity when put together,” he said.

According to the report, the Klang Valley’s office occupancy rate is at 72.1% as of 1H2021 after a further fall of 3.3% from 75.4% recorded in 1H2020 while the current vacant space stands at 41.9 million sq ft.

Meanwhile, the industrial sector continues to attract more attention than others at present.

“Viewed as one of the more stable sectors performing in a pandemic environment, it is especially so due to the logistics, warehousing and healthcare segment. This is further boosted by the overwhelming demand for e-commerce transactions which will continue to hold the spotlight moving forward.

“Considering the slower relative pace of incoming supply, especially for managed industrial parks with built-to-suit arrangements, industrial property investment will be keenly observed this year,” Sulaiman said.