KUCHING: In the property sector, the residential sub-segment will still stand firm as the expected interest rate hike in the coming months will be gradual and minimal. Further to that, property sales is driven by sentiment and not just interest rates alone.
HIGH-RISE RESIDENTIAL: Property sector focuses on residential sub-segment which remains bullish as the impact of interest rate hike is expected to be minimal.
Analysts concur that the property market is still strong especially in the residential sub-segment due to increase in demand and stronger consumer sentiments. Industry sources were of the opinion that well located properties from developers with a strong track record would be well received by discerning house buyers in the coming months.
ECM Libra Capital Sdn Bhd (ECM Libra) opined that investors’ concern on the impact of the interest rate hike had been overblown. It foresaw the resident sub-segment to register higher sales this year amid the still low interest rates and improving demand.
The research firm brought to attention the weekly property highlights that included Naim Holdings Bhd (Naim) announcement of its plans to partner Cahya Mata Sarawak Bhd (CMS) and Bintulu Development Authority (BDA) to build a RM1.5 billion township in Samalaju. For the record, the new township covered an area of 2,200 hectares and would be developed over a time frame of 10 years. Naim would hold 60 per cent of the tie-up with CMS having 30 per cent and BDA the balance.
Another major development announced last week was the redevelopment of the Sungai Besi Royal Malaysian Air Force (RMAF) base which was purportedly agreed in principle by the cabinet. According to sources, a consortium comprising 1Malaysia Development Bhd (1MDB), Lembaga Tabung Angkatan Tentera (LTAT) and Datuk Desmond Lim of Malton Bhd, would be developing the 162 hectares site into a multi-billion ringgit Islamic financial centre.
Up north in Penang, Plenitude Bhd acquired a piece of land in Batu Ferringhi for RM45 million. The company said the land measuring about 165,000 square metres would translate to a cost of about RM273 per sqm or RM25 psf. The company planned to develop medium-high end, semi-Ds houses and condominiums on that site.
Despite all the given factors, there was no doubt that the property sector rebounded last week with the KL Property Index gaining 1.8 per cent. ECM Libra highlighted that the selective buying was seen in large capital property investment companies such as KLCC Property Holdings Bhd and IGB Corporation Bhd, as well as UEM Land Holdings Bhd, IJM Land Bhd, Sunway City Bhd (Sunway City)and Mah Sing Group Bhd.
On major shareholdings changes, Employees Provident Fund (EPF) acquired 1.1 shares in SP Setia Bhd last week, Tong Kooi Ong acquired 0.3 million shares in Sunrise Bhd (Sunrise) and Aberdeen Asset Management Sdn Bhd and Datuk Dr Yu Kuan Chon acquired 0.4 million and 0.1 million shares in YNH Property Bhd respectively.
Based on all the pros and cons, the research firm still saw little upside in big capital property stocks and as such preferred laggard mid capital property stocks such as Sunway City and Sunrise to be at RM5.00 per share and RM3.58 per share respectively.