KUALA LUMPUR: Certain real estate segments, including high-end condominiums, in key areas in Malaysia may not be in the pink of health now and in the near future, according to Knight Frank Malaysia. The global property consultant, however, said there would be growth despite the cloudy outlook for all market sectors amid weakening in the domestic economy and global uncertainties. The country’s economic growth would continue to be driven by significant increase in construction activities, in particular infrastructure projects, according to Frank Knight Malaysia’s half-year real estate report released yesterday.

The report looks at market performance across the property mix of residential, office and retail, and highlights the trends and outlook in four key markets in Malaysia — Kuala Lumpur, Penang, Johor Baru and Kota Kinabalu.

“The slew of infrastructure-related projects in the country will inevitably shift the focus of future developments,” said Frank Knight Malaysia managing director Sarkunan Subramaniam. He expects more activities along the various transportation routes as a higher segment of the population embraces public transport. With Phase 1 of the Mass Rapid Transit Sungai Buloh-Kajang Line slated to be operational by year-end, urbanites in Klang Valley would experience improved mobility, he said. “Penang is benefiting from the RM337 million Bayan Lepas Expressway that was opened to traffic in early April.

Sabah is also set to benefit long term from big infrastructure projects, such as the Pan-Borneo Highway and Bus Rapid Transport system.” On the recent signing of the memorandum of understanding (MoU) between Malaysia and Singapore for the high-speed rail (HSR) project, Subramaniam said it was a step closer to bringing the “game-changer” to reality. The MoU was signed on July 19 in Putrajaya.

The 350km HSR project, targeted for commercial operations in 2026, would reduce travel time between here and Singapore to 90 minutes. The report also highlighted that the high-end condominium market here remained lacklustre as potential buyers and investors continued to adopt a “wait-and-see” approach.

The report said multinational corporations from marine and offshore sectors were enticed to relocate here in view of attractive currency and competitive rental rates. It added that consumers continued to hold back on spending, as evident from weaker retail sales data in the Klang Valley in the first quarter of this year (-4.4 per cent) against the 1.3 per cent growth in the fourth quarter of last year.

However, there are still opportunities in the Klang Valley retail market, particularly in upcoming under-served but well-populated areas. The report said Iskandar Malaysia in Johor was still attractive to investors with cumulative investments so far standing at RM202 billion.