Investment Information

Property Ownership: Individual

Off-the-Plan
A common type of property investment where investors purchase assets at launch price directly from the developer. Investors can enjoy the benefits of possible capital appreciation between the period of construction to completion (approximately 3 years for residential projects).

Completed Projects
The majority of residential property transactions in Malaysia are made up of secondary sales i.e. sale or transfer of completed projects. Under this category, investors purchase through certified real estate agents at the market's asking price.

Buy-to-Rent Property
Condominiums are the favoured type of properties to rent out. It is common practice to sign 2-year tenancy agreement contracts for residential property. For commercial property, a 3-year contract is practiced. Investors who have the intention of renting out their property should consider the following:

•     Locations that offer better returns
•     Property that comes with good property management services

OWNERSHIP TITLES

Freehold
Freehold property belongs to the owner in perpetuity. Transfer of interest in the property can proceed without any restrictions or approvals from the government.

Leasehold
Land leased by the government for a specific term, most commonly in the duration of 33 years or 99 years. The land will automatically return to the State Authority upon the expiry of the leasehold term. Transfer of interest to another party may require state authority approval.

Landed
Issued for properties built on individual plots of land that is sub-divided horizontally.

Strata
A form of ownership commonly found within residential and commercial multi-storey buildings, as well as landed properties within a gated community. Strata title properties comprise individual lots owned by individual owners and common property which is defined as everything else on the parcel of land such as the common stairwell, driveways, roof, etc.

Malay Reserve Land
Article 89 of the Malaysian Constitution states that a person of the Malay ethnicity may own land or possess an interest in a Malay Reservation Area. A Malay Holding includes any alienated land within a Malay Reservation Area which has been duly declared and gazetted as a registered interest of a Malay citizen, a proprietor or co-proprietor. Once land is gazetted as a Malay Reservation Area, it can only be sold, leased or otherwise disposed of only to Malay individuals or corporations.

 

Property Ownership: Corporate

Acquisition of property in Malaysia is subject to conditions on equity and paid-up capital and may be subject to subsequent approval from the Economic Planning Unit. Please refer to EPU’s Guideline on Acquisition of Properties (Updated January 2010).

Foreign interest is NOT ALLOWED to acquire:

  • Properties valued less than RM500,000 per unit
  • Residential units under the category of low and low-medium cost as determined by the State Authority
  • Properties built on Malay reserved land
  • Properties allocated to Bumiputera interest in any property development project as determined by the State Authority.

Direct Acquisition (Completed or Off-the-plan)
Corporate investors have the option to purchase directly from a developer's master plan, depending on the degree of specifications provided by the developer. Shop offices usually take 18 – 20 months to complete while Grade A office buildings take about 3 years to complete.

Land Purchase with Approved Plans
Land can be purchased only with approved development plans or with the submission of development plans.

En Bloc Lease
Consult the developers office and certified valuers or real estate agents for available options of en bloc leases, both residential or commercial.

Sale & Leaseback
This mode of acquisition ensures rental returns as the property is purchased tenanted. Most sale & leaseback deals in the market are individually negotiated to the buyer and seller’s requirements.

OWNERSHIP TITLES

Freehold
Freehold property belongs to the owner in perpetuity. Transfer of interest in the property can proceed without any restrictions or approvals from the government.

Leasehold
Land leased by the government for a specific term, most commonly in the duration of 33 years or 99 years. The land will automatically return to the State Authority upon the expiry of the leasehold term. Transfer of interest to another party may require state authority approval.

Strata
This is a form of ownership commonly found within multi-storey buildings, both residential and commercial, as well as landed properties within a gated community. Strata title properties are comprised of individual lots owned by individual owners and common property which is defined as everything else on the parcel of land such as the common stairwell, driveways, roof, etc..

Malay Reserve Land
Article 89 of the Malaysian Constitution states that a person of the Malay ethnicity may own land or possess an interest in a Malay Reservation Area. A Malay Holding includes any alienated land within a Malay Reservation Area which has been duly declared and gazetted as a registered interest of a Malay citizen, a proprietor or co-proprietor. Once land is gazetted as a Malay Reservation Area, it can only be sold, leased or otherwise disposed of only to Malay individuals or corporations.

 

Property Options: Individual

Condominiums
Market prices for condominiums are higher than apartments as these developments are usually of better quality and offer a wider range of facilities as compared to conventional apartments. Facilities may include a swimming pool, convenience stores, tennis courts, a gym and a club house.

A similar category is service apartments. These are usually located in busy commercial districts and similar to hotels in concept, except that units can be bought or rented for short to mid-term stays.

Semi-Detached & Terrace Houses
These consists of houses built side by side as units sharing a wall usuall found in the same design & layout.

Bungalows
In Malaysia, bungalows refer to detached, single unit family residences sometimes two or three stories high, with its own compound surrounding the structure.

Beach Villas & Marina Homes
Beach villas are usually custom-built to the owner's requirements. Marina homes with mooring facilities are also available in choice locations in Malaysia.

Residential Land
You can purchase vacant residential land to build your own home - this is subject to approval from the relevant authorities.

Golf Resort Homes
Malaysia offers a large selection of quality golf courses, some complete with resort homes. These are usually completed bungalow units or land sold for the construction of bungalows to the owner's design requirements. Most of these developments offer the privilege of free or discounted golf club membership to the home owners. 

Gated Communities
A gated community is a residential community set within perimeter walls with controlled access for vehicles and pedestrians. It usually consists of small residential streets and includes various amenities. Typical amenities include swimming pools, tennis courts, gyms, club houses and on-site dining. It is common to see a mix of residential properties such as bungalows, semi-detached houses, terraced houses and condominiums within one gated community.

Property Options: Corporate

Investments in commercial property typically generate a stable rental yield between 6-10%.

Shop Offices & Shop Houses
Shop offices have combination use and can potentially offer higher return on investment. Owners can opt to rent out the ground floor to food & beverage outlets or as showroom space. Upper floors are rented out as office space.

En Bloc Towers (Offices or Condominiums)
Grade A commercial office buildings in prime areas in the central business district or growing satellite towns are favoured by large corporations and multinational companies. Occupancy levels fall within the average range of 80% - 90% in the city centre although turnover could be higher in the suburbs. Currently, most Grade A buildings are found in Kuala Lumpur.

Industrial Property
Industrial property is found in clustered areas designated as industrial estates. The terms industrial parks and technology parks are also commonly used to describe industrial areas, depending on the industries concentrated there.

Commercial Land
Vacant land that investors can purchase for commercial use. The purchaser must state their intentions and provide initial plans on how the plot of land will be developed. The development will be subject to approval from the relevant authorities.

Hotels
At the end of 2009, Malaysia housed approximately 150 hotels graded 4 stars and above. Average hotel occupancy rates are fairly stable around 60 – 65%. In tandem with the increased tourist arrivals expected from this year onwards, at least 10 new international hotels are scheduled to open across Malaysia in 2010.

Shopping Malls
Average occupancy rates for retail malls in Malaysia hover around 90%. Compared to the booming popularity of regional malls in the past, the current trend and demand is moving towards suburban malls.

As prime land prices in city centres of key Malaysian states continue to appreciate, developers look towards cheaper land in suburban areas complemented by the strong demand for neighbourhood malls that serve local communities.

Shopping malls in Malaysia also generate stable recurring income, offering developers further opportunities through sale and leaseback arrangements or REIT placements.

Testimonials: Individuals

"As an investment advisory business, IP Global prides itself on helping our clients understand property markets inside and out, and one of the best resources we have in Malaysia is Malaysia Property Inc. MPI is a great resource for us, helping us understand the overall Malaysian property market as well as government initiatives like infrastructure improvements, tax , immigration and other matters important to our clients."

- Tim Murphy, CEO of IP Global

 

“In term of Chinese investors coming here, our experience with them is that Malaysia is still very much unknown to them. Malaysia Property Incorporated (MPI) is doing a very good job but a lot more can be done”

Gavin Tee,
President and Founder of Swheng Tee International Real Estate Investors Club

 

 

Testimonials: Corporate

“Selecting Malaysia as our second Asia Pacific market was a natural choice. With an expanding economy and growing population, Malaysia was an ideal market. Today, 15 years after setting up, IKEA now owns a standalone store offering customers the experience we are synonymous with and this was made possible due to the friendly business policies and cooperation from all related parties.”


Joseph Lau, General Manager of IKEA Malaysia

 

“We love the location of Iskandar Malaysia and are delighted by our partnership with Iskandar Investment. The LEGOLAND Malaysia park will build upon the success of our other internationally recognised LEGOLAND parks in Europe and North America, and we have no doubt that once open, it will become the ultimate destination in the region for families with young children.”


John Jakobsen, Managing Director of LEGOLAND Parks

 

“Being an international university of high standing as well as looking to take the UK to the international market, we thought that Southeast Asia would be an intrinsic location. Among many factors, we chose Malaysia, the centre of Southeast Asia, where we have historic links. We are confident of a stable democracy, a multicultural society and a neutral country. We are happy and look forward to working with Iskandar Investment to produce the best doctors in Malaysia.”


Professor Reginald Jordan, Chief Executive Officer of Newcastle University Medicine Malaysia,
(NUMed Malaysia)

 

“Titan Chemicals Corp. Bhd. is a leader in the Malaysian and regional petrochemicals and plastic industries. From the construction of its first facility, a RM300million polypropylene plant, in Malaysia in 1989, its investments have grown twenty fold. Now, the Titan Group has ten integrated process facilities in Pasir Gudang and Tanjung Langsat in the southern state of Johor, Malaysia, and has expanded regionally to Indonesia as well. One of the benefits of Titan's facilities at the southern tip of Malaysia is that it enhances the convenience of import and export, and allows for competitive transportation pricing. As the petrochemical industry is a very competitive industry, performance indicators and cost management are monitored closely.”


Warren Wilder, Managing Director of Titan Chemicals

 

 


 


 

 

Property Ownership: Individual
Property Ownership: Corporate
Property Options: Individual
Property Options: Corporate
Testimonials: Individuals
Testimonials: Corporate