Inside Malaysia’s efforts to weather a lethargic property market
Inside Malaysia’s efforts to weather a lethargic property market
Malaysian and Chinese governments team up for real estate developments
Grappling with a comparatively listless property sector, Malaysia is counting on one trick up its sleeve: a continuous outpouring of foreign direct investment (FDI). In an effort to elevate FDI numbers, the Malaysian government has introduced a round of tax exemptions to willing investors.
According to the Nikkei Asian Review, investors in Bandar Malaysia, a joint venture between the Chinese government’s China Railway Engineering Corp and Malaysia’s Iskandar WaterFront Holdings, stand to enjoy income tax breaks for the next 10 years, among other incentives.
“As a diversified economy, we believe we can withstand these challenges and overcome them, especially with the continued inflow of foreign investments into the country. We are definitely doubling our efforts in achieving the country’s investment target,” International Trade and Industry Minister Mustapa Mohamed said.
China Railway Engineering is ploughing MYR200 billion (USD49 billion) into Bandar Malaysia, which will feature a 350-km high-speed rail line to Singapore down south, to be followed by a longer line toward Kunming, China up north. The development will also be home to the state-owned company’s Southeast Asian headquarters.
More: Western zones of Iskandar Malaysia to see price surge in next 10 years
China has openly kindled interest in Malaysian property over the past year, and Malaysia’s government has been quick to incentivise such interest. In March, Prime Minister Datuk Seri Najib Razak accorded a duty-free status on Forest City, a “smart city” project of China’s Country Garden Group in Johor.
Malaysia approved MYR12.8 billion (USD3.1 billion) in FDI projects in the first quarter of this year, up from 10 billion ringgit over the same period in 2015.
Some suspect the increased Chinese activity is China’s way of repaying Malaysia for taking a less combative stance in the ongoing territorial dispute over the South China Sea.
Malaysia may stand to benefit in the long run. With FDI oozing from China, Malaysia may be on track to achieve its dream of achieving developed-country status by 2020.
Kuala Lumpur will host the inaugural Property Report Congress Malaysia on 11 August 2016 at the InterContinental Kuala Lumpur. The whole-day conference is a dedicated, high-level forum for industry leaders, VIPs, and real estate professionals to discuss how to continue driving growth and excellence in one of the world’s emerging real estate markets. For tickets, partnerships and enquiries, visit the website or contact [email protected].
Source: Property Report