Knight Frank Sees Gloomy Outlook for Commercial Properties in Sabah
Knight Frank Malaysia launches the Regional Commercial Real Estate Investment Sentiment Survey (RCREISS) 2020 for Penang, Johor and Sabah. The reports highlight views of key industry players in these regions.
Without a doubt, investors are adopting the “wait and see” approach as the local and global economies screeched to a halt amid the COVID-19 pandemic. The deadly virus has sent half the world into semi or total lockdown as countries try to contain the spread by restricting travel, banning mass gatherings and encouraging social distancing amongst other measures.
Like any other cities, the commercial property market in Penang, Johor and Sabah is expected to remain in the doldrums as weak sentiments prevail for the remainder of the year. The economic toll from the pandemic continues and has yet to be calculated, and recovery, when it comes, will be a welcome relief.
Sabah has been progressively gaining prominence as one of Asia’s popular travel destination, with its rich natural endowments ranging from the wide cultural heritage of its natives, exotic flora and fauna, biodiversity from the ocean deep to mountain high and year-round tropical weather. In 2019, the state welcomed 4.2 million visitor arrivals from 1.1 million in 2002, evident of the growing importance of the tourism industry to the state’s economy, after the agriculture and oil & gas industries.
Alexel Chen, Executive Director of Knight Frank Sabah, says, “The COVID-19 pandemic has disrupted the thriving tourism industry and its related services when the state government announced the suspension of all direct flights from China and South Korea. The implementation of the MCO and travel bans subsequent to that coupled with the plunge in crude oil price and lower CPO price, further dampen market sentiment.”
Chen added, “In light of the current global crisis, there is an urgent need for relevant stakeholders (including authority) to diversify targeted tourist catchments and products in order to affirm the sustainable growth of the industry. In addition to that, government policies to encourage an inflow of Foreign Direct Investment (FDI) into the state through better financial incentives, well-established infrastructure, and desirable administrative processes and regulatory environment, will collectively bolster the footing and positioning of the industry to better withstand future adversity and challenges.”