Retail hospitality prospects are good, but the office and industrial sector are lagging behind
Welfare policies have been introduced, tourism has recovered, unemployment has been mitigated, and the prospects for local retail and hotel real estate are bright.
However, the vacancy rate of offices in our country remains high, causing property trusts, which focus on office buildings, to continue to face pressure; while industrial property trusts are popular, the hot market has also caused industrial prices to soar, limiting rent rates.
As a result, Hong Leong Investment Bank research only gave the real estate trust sector a “neutral” rating.
The recovery of retail real estate is strengthening
Analysts pointed out that China's retail sector is strong, mainly recovering from the COVID-19 pandemic, and research suggests that the upward trend will be maintained.
The 13% annual salary increase for public servants, the launch of a third employee provident fund account, an improvement in the unemployment rate, and a stable salary for employees all led the study to believe that personal expenses would increase, thereby stimulating the return of consumers and the growth of retail space leasing.
However, Merdeka 118 Shopping Mall and Phase 2 of the Damansara Highland Park will both be put into operation this year, which may curb the upward space for rents in existing popular shopping malls.
Travel recovery benefits hotels
On the other hand, the number of visitors to Malaysia in the first quarter of this year recorded 5.8 million; while our country's hotel operations are expected to maintain good performance in the short to medium term as the number of visitors to Malaysia grows.
The main shopping mall located in the capital Kuala Lumpur will be stimulated by travel spending based on the extension of the convenience policy that exempts Malaysian and Chinese travelers, the restoration of international flight momentum, and the expansion of the number of travelers.
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