LaBrooy: East M’sian real estate to revive once pandemic wanes
KUCHING: The outlook for Sabah and Sarawak’s real estate sector is set to revive as the pandemic wanes and tourists return in the near future.
According to Asia Pacific Real Estate Association (Aprea) board member Datuk Stewart LaBrooy, this comes as the property markets in East and West Malaysia could not be more different.
“West Malaysia has a vibrant economy, the best infrastructure in Asean except for Singapore and large and diverse property market, a strong pool of knowledge workers and an established banking system,” he said to The Borneo Post in an interview.
“It has a racted over the years many multinational industrial players who have set up their businesses in West Malaysia. It also boasts a strong housing market with large scale developers investing in rolling out huge township developments.
“Sarawak and Sabah on the other hand has a strong agribased economy but have small populations in relations to their land masses.”
As Sabah has a population of 3.543 million and a land mass of 74,000 square kilometres (sq km) whereas Sarawak with the larger land mass of 124,450 sq km with a meagre population of 2.81 million, LaBrooy said this translates into a ‘largely domestic’ property demand.
“And over 2020 it was badly affected by the movement control order, with drops of over 20 per cent and a fall in valuation as well,” he continued. “Occupancy of commercial building fell nearly 50 per cent pu ing a huge burden on landlords. West Malaysia was nowhere this badly affected.
“But the Achilles heel of both economies are the fact that tourism played a huge part of its success and tourist arrivals fell dramatically affected all related real estate from hotels to tour companies, malls and so on.
“Although both parts were affected West Malaysia was able to ride out the storm a much better.”
Looking forward, the state governments of Sabah and Sarawak have decided to put a huge investment into infrastructure in the state with the Pan Borneo Highway as well as upgrading of rural roads and bridges.
“Sarawak is also blessed with green hydro power in the dorm of the Bakun Dam and there are other dams being constructed to boost power in the states. This will in turn attract companies that require energy for their operations and today boasts one on the largest aluminium smelters in the region,” he said.
“It could also attract data centres if sufficient communication cables are laid from the two states to link up with the other hubs in Hong Kong and Singapore.
“They are also blessed with oil, timber, cocoa, and oil palm as much sought-after commodities for exports and so have a lot of natural resources to offer.
“As the pandemic wanes and tourists return there will be a revival in real estate in both states. With the boost in infrastructure spending and the move by Indonesia to move their capital next door to Sarawak there will be a huge rise in building activity which Sarawak which would have by then developed a world class infrastructure can capitalise on.”