2015 GDP growth decelerated slightly to 5.0%, due to the weak external environment. Bank Negara Malaysia (the central bank) projects growth to be slightly lower than this in 2016, supported mainly by domestic demand.

RM1.40 billion worth of investment transactions were recorded in Q1/2016. Of the 20 transactions recorded, 12 involved land acquisitions, with the remainder being investments in existing properties such as hotels, factories/warehouses, and office buildings.

Local property developers continued to acquire land. Six land transactions were in Greater Kuala Lumpur, two in Kedah and one each in Johor, Penang, Negeri Sembilan and Melaka. The total value of these land transactions equalled RM649.50 million.

Notable land transactions in Greater Kuala Lumpur included 10.12 acres of land in Gombak purchased by Selangor Dredging Berhad for RM153 per sq ft; 2.67 acres of land in Kuala Lumpur acquired by Eupe Corporation Berhad for RM278 per sq ft; and 1.298 acres of land at Jalan Batai, Kuala Lumpur acquired by Selangor Properties Berhad for RM569 per sq ft. All these lands have been earmarked for condominium developments.

Perbadanan Kemajuan Negeri Selangor (PKNS) sold its 12.018 acres of industrial land in Kota Damansara with a lease period of 60 years to a local SME for RM105 per sq ft. In the same review quarter, Sunway Berhad acquired 6.35 acres of industrial land in Kampung Baru Subang for an average of RM118 per sq ft, in line with its recent plans to grow its industrial property development offerings.

Outside Greater Kuala Lumpur, notable land transactions included Hua Yang’s acquisition of 73.16 acres of freehold development land in Plentong, Johor for RM17 per sq ft and LBI Capital Berhad’s disposal of its development land in Batu Ferringhi, Penang Island, for RM256 per sq ft.

Q1/2016 saw eight property investment deals concluded, with a total sales value of RM753.32 million. The transactions included five factories/warehouses, two hotels and a purpose-built office building.

In January 2016, Tropicana Corporation Berhad disposed of the 10-storey Sky Express Hotel located at Jalan Pudu, Bukit Bintang in Kuala Lumpur for a purchase consideration of RM55.00 million, or approximately RM322,000 per key. In the same month, Tropicana Corporation Berhad disposed of its office building, inclusive of 322 car parking bays, known as “Dijaya Plaza”, which is located along Jalan Tun Razak, Kuala Lumpur, for RM140.00 million, or RM895 per sq ft on net lettable area to Kenanga Investment Bank Berhad.

The major transaction of the quarter, however, was the sale of Aloft Kuala Lumpur Sentral Hotel to Prosper Group Holdings Ltd. for a purchase consideration of RM418.70 million, or RM869,000 per key, in late March 2016. Developed by Aseana Properties Ltd, a London-listed property developer, Aloft Kuala Lumpur Sentral Hotel is strategically located in KL Sentral, with a total of 482 rooms, and is generally regarded as one of the best performing hotels in the city.

View the full report here.