After a sombre 2020, 2021 has been all about recovering from the pandemic. With still new variants like Omicron clouding the country, the property industry is set to recover since last year. The first sign of a recovering property market is when land banking escalates. As developers set out to hunt for good properties in 2021, that sign signaled green, suggesting a more prospective year in 2022.

Six of the best property experts were asked in 2021 about the property transactions that added significant value to property industry recovery. The experts are:

• Foo Gee Jen, Group Managing Director of CBRE | WTW.
• Sarkunan Subramaniam, Managing Director of Knight Frank Malaysia
• Siva Shanker, CEO of Real Estate Agency, Rahim & Co
• Adzman Shah Mohd Ariffin, CEO of ExaStrata Solutions Sdn Bhd and Chief Real Estate Consultant
• Stanley Toh, Executive Director of Laurelcap Sdn Bhd
• Nabeel Hussain, Deputy Managing Director and Head of Capital Markets of Savills Malaysia

According to them, these are the 5 property transactions they found most significant in 2021:

1. The sale of Dutch Lady Milk Industries Bhd’s factory land

   Dutch Lady Milk Industries Bhd’s factory land is located in Sector 13, Petaling Jaya, Selangor. The 9.93-acre land is a prominent landmark in Petaling Jaya, which was sold for RM 200 million to UEM Sunrise Bhd. At RM 462.29 per square foot, the land was brokered for sale by CBRE | WTW.

   The real estate expert, Siva, states that Petaling Jaya is a prime residential and commercial satellite suburb of KL. As such, he believes that this sale could be a catalyst for Sector 13’s urban regeneration.

   The land was sold above market price considering only 38 lease years are left for the site as per Adzman. Toh’s statement is similar to Adzman’s as he says that the RM 462.29 psf price tag is a very encouraging benchmark for such a large land area. That price tag also suggests the developers’ confidence in the property market of Petaling Jaya.

   Nabeel adds that the Dutch Lady land sale is one of the most significant transactions by a major developer investing in Section 13 special development zone following Kickapoo sale in the same area.

2. Kickapoo factory land sale

   The Kickapoo factory is another significant land located in Section 13 of Petaling Jaya. The 2.06-acre land, home to Sinalco and Kickapoo Joy Juice bottling factory, is located directly across the road from the Dutch lady parcel. The land was sold by Singapore based National Aerated Water Co (KL) to GSD Land (M) Sdn Bhd at a price of RM 46 million.

   The Kickapoo land sale was in Adzman and Nabeel’s list of most significant property transactions in 2021. The land sold at RM 514 per square foot was way above market value according to them, especially since it had only 39 unexpired leasehold years. Nabeel also stated that the land was sold at the highest record price in Section 13, PJ.

3. IGB Commercial Real Estate Investment Trust (REIT)

   According to the experts, another notable property transaction in 2021 was IGB Commercial Real Estate Investment Trust (REIT). Listed in Bursa Malaysia, the REIT comprises 10 office properties worth RM 3.16 billion.

   Siva expressed IGB REIT as a notable transaction in 2021 because this transaction shows how good class office buildings are still in demand even amid the pandemic. Nabeel’s opinion was aligned to that of Siva as he too agrees that the office portfolio prospect of the REIT is notable. And, in spite of being a related-party transaction (RPT), it was sponsored by a major Malaysian developer who already has a retail REIT (IGB REIT), thus suggesting the REIT’s confidence among investors.

   Though IGB Commercial REIT is an RPT, it had a surprising initial public offering in a situation where the property industry was struggling due to the pandemic. Amid a compressed yield ranging between 3.5% and 5.5%, Foo described it as the largest transaction of 2021.

   Toh highlighted that GTower’s transaction price was RM 739.8 million and the REIT’s assets in Centrepoint North and Gardens North Tower had a combined transaction price of RM 578.6 million. The competitive price at which the assets were transacted shows the confidence of investors in an asset class that has been one of the most badly affected amid the pandemic.

4. Scientex’s multiple land transactions

   Scientex was chosen by experts as having a valuable contribution to property transactions in 2021 due to its multiple land purchases. Over the year 2021, Scientex bought 2,910 acres of land worth RM 1.23 billion.

   Scientex bought 251 acres of agricultural land in Jenjarom, Selangor from Seriemas Development Sdn Bhd for RM 207.6 million. They purchased another 343 acres of freehold agricultural land in North Seberang Perai for RM 246.7 million from Sunrich Conquest Sdn Bhd and Titanium Greenview Sdn Bhd. Apart from that, they acquired another big piece of land covering 960 acres in Tebrau Johor from S P Setia for RM 518.1 million.

   Nabeel selected Scientex as a valuable property transaction for 2021 because of its multiple land acquisition that would go into developing affordable homes. Siva pointed out that Scientex’s land acquisition in Jenjarom shows that South Klang Valley sites are still in demand and that this transaction would further add to the development of this location.

5. Land sale in Jalan Cochrane

   Foo, Adzman and Siva chose this particular land sale as one of the significant property contributions of 2021. Boustead Holdings Bhd sold the 6.59 acre of freehold land to Sunway Bhd for RM 233.39 million.

   Foo believes this is only the beginning of land deals in the developing area, Cheras, as it is a new growth centre in KL. Adzman agrees with Foo, saying that the location of the land is strategic as it is situated in a growing commercial hub with close proximity to Sunway Velocity and Ikea. Besides, its integrated connectivity via MRT and LRT services further boosts the potential of the area.

   Siva chose this property transaction as a notable one for similar reasons as Adzman. He says the land is a strategic investment in pock land at the fringes of the city. Due to Tun Razak Exchange in KL and brand new financial centre, the location was already in much demand. So, purchasing this land by Sunway Bhd is an excellent deal in an excellent location with good construction prospects.

These 5 land sales set a benchmark of what’s to happen in 2022. Such land banking by developers suggests many new construction and development projects are in the pipeline. They are expected to contribute to the development of the area and revive the property industry. It is, however, yet to see how the year turns out as the property sector in Malaysia is in its recovery phase.

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