New Act to require 75% flat owners' consent, KL-Singapore HSR project on track even as Japanese firms opt-out and more

9th January – 15th January

The Malaysian government is working on a new Act dedicated to urban renewal and redevelopment.

Meanwhile, Transport Minister Anthony Loke Siew Fook said the progress of the Kuala Lumpur-Singapore high-speed rail (HSR) project would not be affected by the decision of some Japanese companies to opt-out of the request for information (RFI).

1. New Act to require 75% flat owners’ consent

The Malaysian government is working on a new Act dedicated at urban renewal and redevelopment.

Datuk Azman Abidin, political secretary of Prime Minister Datuk Seri Anwar Ibrahim, said the Act is set to be tabled during Parliament’s second session, reported The Star.

“It may stipulate 75% residents’ approval for redevelopment projects,” he said.

This is a change from the present threshold that requires unanimous approval, making it hard for developers to carry out redevelopment projects.

He noted that redeveloping old flats is necessary given that older buildings have many issues such as leaks and damaged roofs.

“We need land to build more affordable homes, and we need developers to build them,” he said.

“But we are facing land scarcity. No developer is going to do it without incentives, hence a compromise is needed.”

Under the Madani project, housing units will be offered for sale and rent to M40 and B40 income groups. An 800 sq ft unit will be offered for RM200,000 and a 750 sq ft unit for RM180,000.

The challenge, however, is getting developers to take on such projects.

He noted that developers will only accept such projects if they are given incentives such as higher plot ratios and density.

2. KL-Singapore HSR project on track even as Japanese firms opt-out

Transport Minister Anthony Loke Siew Fook said the progress of the Kuala Lumpur-Singapore high-speed rail (HSR) project would not be affected by the decision of some Japanese companies to opt-out of the request for information (RFI).

“It is up to them (the firms). This does not mean we’ll halt the project just because one party is not interested as many hundreds of others have expressed interest (in the project),” he said.

The companies will be evaluated before they can go through the next process, which is the request for proposal (RSP), reported the New Straits Times.

It was reported that some Japanese companies, including East Japan Railway Co, have decided not to participate in the HSR project’s RFI.

This leaves the door open for Chinese companies, who have constructed a high-speed railway in Indonesia, to clinch the project.

A shortlist of candidates is expected within several months, while full-fledged negotiations with the Singapore government will start later this year.

The HSR project is expected to reduce travel times between Kuala Lumpur and Singapore to just 90 minutes.

3. Johor sees growing demand for high-rise apartments

Johor’s real estate market performed well in 2023, registering a notable increase in demand for high-rise apartments and landed homes.

Samuel Tan, Executive Director of KGV International Property Consultants, expects the positive momentum to continue in 2024, driven by catalysts such as Forest City’s designation as a special financial zone (SFZ) and potentially as a special economic zone (SEZ), the development of rapid transit system (RTS) as well as the potential revival of the Kuala Lumpur-Singapore high-speed rail, reported the New Straits Times.

He also expects industrial properties, especially build-to-suit factories, to remain hot.

“Data centres have been queuing for suitable sites. Super warehouses and distribution centres are poised to be the new class of industrial properties in Johor Bahru,” he said.

Tan also expects offices in certain areas, such as locations designated as SEZ and SFZ, to witness increased demand.

Given the positive sentiment, he sees a 10% to 15% average growth in transaction volume and price.

However, there remain some challenges including international geopolitical risks, a US-China trade war, domestic political surprises and an uncontrolled supply of high-rise serviced apartments.

He underscored that it is important to pace the supply pipeline to avoid overhang issues.

Tan also pointed to excessive compliance costs as another area that could negatively affect the property market.

4. Five LRT3 stations to be operational by 2027

The five previously cancelled Light Rail Transit Line 3 (LRT3) stations are expected to be operational in 2027, said Transport Minister Anthony Loke.

The stations are Tropicana, Temasya, Raja Muda, Bandar Botanik and Bukit Raja, reported Bernama.

“The stations have not been built, so it cannot be completed within a year. These are optional stations to be reintroduced, with implementation expected to take two or three years,” said Loke.

Running from Bandar Utama to Klang’s Johan Setia, the LRT3 project is expected to commence operations on 1 March 2025. The mega transportation project, estimated to cost RM16 billion, is envisaged to benefit about two million residents.

As of 25 December 2023, the LRT3 project is 91.68% complete, with the LRT Shah Alam line operations set to commence operations in March next year.

5. Kota Kinabalu’s property market sees some progress

Kora Kinabalu’s property market registered some progress in 2H 2023, with residential supply within Greater Kota Kinabalu at 136,332 units in Q3 2023, said Knight Frank.

The condominium/apartment segment accounted for the majority of the stock at 39.7% or about 54,119 units.

Knight Frank shared that the residential market in Greater Kota Kinabalu slowed down in 1H 2023, with 1,227 transactions worth RM573 million, reported Borneo Post Online.

“The terraced house and condominium/apartment categories dominate the overall volume and value of residential transactions with 81.6% and 66.7% share respectively,” it said.

Meanwhile, Kota Kinabalu’s existing supply of privately owned purpose-built offices stood at 5.2 million sq ft, with an average occupancy rate of 88.8% as of Q3 2023.

Monthly asking gross rentals for selected privately-owned office space within the central business district (CBD) ranged between RM2 per sq ft (psf) and RM5.50 psf.

Notably, the supply of privately owned purpose-built offices is forecasted to remain firm in the near future due to a mismatch in rental growth and development costs.

Rental and occupancy levels are expected to remain stable, with landlords exploring space compartmentalisation, which could lead to shorter vacancy periods and improved rental yields.

6. DBKL clears air on proposed de-gazettement of flood pond

Kuala Lumpur City Hall (DBKL) has clarified that the proposed de-gazettement of land surrounding the Kampung Boyan (Sungai Bunus) flood retention pond is not intended for commercial or property development.

It explained that the application for the cancellation of the reserve is aimed to standardise the classification of lands, designating one part as “Flood Retention Pond” and the other part as “Open Area,” reported The Star.

“The proposed revocation is to better structure the areas of responsibilities between the related government agencies,” it said.

“In this case, it involves the Department of Irrigation and Drainage (JPS) for the flood retention pond and DBKL for the management and maintenance of the open space area.”

The reclassification will only occur after securing the Federal Territory of Kuala Lumpur Land Executive Committee’s (JKTWPKL) final approval.

Gazetted on 31 July 2018, the Sungai Bunus flood retention pond lies along Sungai Bunus, which is a small river running through Kuala Lumpur.