- Malaysian economy continued to expand but at a slower pace of 4.0% year-on-year (YOY) in Q2 2011, down from 4.9% YOY in Q1 2010 due to the global slowdown. The growth was driven mainly by domestic demand reflected in strong private consumption and investment activities. The growth forecast of 5-6% for 2011 is still being officially maintained.
- Prime office rent is stable, at RM6.22 per sq ft per month, with no new completions adding to competitive pressure but demand has slowed down reflecting caution in the market (Figure 1). Leasing activities were driven by mainly the oil and gas, IT and finance sectors with the outlook likely to be more sombre in the light of substantial pipeline supply in 2012.
- The retail sector is expected to remain optimistic due to stronger Ringgit and total retail sales being forecasted to grow from RM182.44bn in 2011 to RM279.83bn by 2015.
- The residential sector experienced significant completions in the quarter and this will put pressure on rental especially in the larger prime condominium units where demand has not keep pace. Generally while price remains stable, new pressure to sell is expected as some owners taking delivery of completed units and wishing to exit their investments. There remained selective demand for new launches.
- The investment market was more active with strong deal flows from investors and also supported by end-users buying for own occupation. Going forward the market is expected to be dominated by local investors as foreign investors have become more cautious.
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