Bandar Malaysia revival may not bode well for glut-hit property sector: AmResearch

PETALING JAYA: AmInvestment Bank Research (AmResearch) said the revival of the project may not bode well for the property sector, which is already facing oversupply.

AmResearch said private developers may face tremendous competition from the proposed 10,000 affordable homes in Bandar given the units’ strategic location, public transport connectivity and potentially subsidised pricing.

“This massive integrated development will add more floor space to the already oversupplied residential, commercial, office and retail segments in the Klang Valley,” it added.

The research house said the saving grace is that Bandar Malaysia may stimulate new demand if it is able to draw major international financial institutions, multinational corporations and Fortune 500 companies to locate their regional headquarters there, including tech giants such as Alibaba and Huawei.

PublicInvest Research opined that the impact of Bandar Malaysia will be muted given the current oversupply of commercial space and soft demand due to affordability and financing issues.

“That said, the spillover effect (i.e. high value job creations) from the development should be positive to spur the demand especially the high-end segment in the long term.”

Prime Minister Tun Mohamad has said that the Bandar Malaysia project will include the construction of a People’s Park, 10,000 units of affordable housing, bumiputra participation throughout the project, and priority for the use of local content in the construction process in line with the government’s policy of a people-centric development.

Source: The Sun Daily

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