Buying Industrial Real Estate in Malaysia: A Complete Guide

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Since its independence in 1957, Malaysia has developed from being an economy that relies on agriculture and commodities to attracting manufacturing companies and service providers.

It’s also one of the most open economies globally with a population that speaks English flawlessly. You can find manufacturing of anything from automotive parts, pharmaceutical products, and semiconductors here.

In this article, we review how you can invest in industrial real estate and warehouses in Malaysia, covering the key items.

Topics covered:

  • Can foreigners buy industrial real estate in Malaysia?
  • General Tips and Requirements When Investing in Industrial Properties
  • Malaysia’s Industrial Real Estate Market
  • Industrial Cities in Malaysia
  • Industrial Parks

Can foreigners buy industrial real estate in Malaysia?

Malaysia has some of the least protective property ownership regulations and foreigners can buy commercial real estate on a freehold basis. Continue reading Buying Industrial Real Estate in Malaysia: A Complete Guide

Investing in Malaysia Office Space & Buildings: A Complete Guide

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Malaysia is one of a few Southeast Asian countries that allow direct foreign ownership of real estate and where capital controls are non-existent by comparison.

The ease of doing business, visa options, developed infrastructure, along its English-speaking population has made it a top choice for overseas investors.

Not to forget, it’s considered one of the best places to buy real estate in the world. Besides, residential and commercial real estate costs a fraction in Kuala Lumpur compared to cities like Hong Kong.

The development of commercial areas and economic corridors spur the demand for office buildings in the future. With that said, before you engage in the market, you must understand how healthy it is, about ownership regulations, where to buy, and more.

Topics covered:

  • Can foreigners buy office space in Malaysia?
  • Malaysia’s Office Market
  • Commercial Clusters and Cities in Malaysia
  • Malaysia’s Five Economic Corridors
  • Taxes

Can foreigners buy office space in Malaysia?

Foreigners have no general issues investing in residential or commercial real estate, including land, office space, industrial property, and the list goes on. Continue reading Investing in Malaysia Office Space & Buildings: A Complete Guide

Investing in Malaysia REITs: The Ultimate Guide

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Malaysia has one of the most developed REIT markets in Asia where most are centered around Kuala Lumpur.

At the moment, there are 18 REITs listed on the stock exchange in Malaysia that have attracted many local and foreign investors in the past years.

In this article, we review how you can invest in Malaysian REITs and why this type of asset has become increasingly popular. This is not only the case in Malaysia but in Thailand, Australia, and Vietnam.

Topics covered in this article:

  • Can foreigners buy REITs in Malaysia?
  • The Process to Buy REITs in Malaysia
  • What are the benefits of buying REITs in Malaysia?
  • List of REITs in Malaysia

Can foreigners buy REITs in Malaysia?

Foreigners have no particular restrictions on buying REITs or other securities in Malaysia. Continue reading Investing in Malaysia REITs: The Ultimate Guide

How to Buy Land in Malaysia: A Complete Guide

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Most property buyers prefer to own a house or an apartment. My personal guess is that it’s due to tradition and that people think that the risks are lower compared to when investing in land.

Of course, people tend to buy houses to live in, or to rent the units to tenants.

The land investment opportunities are often overlooked as the yields can be significantly high when buying land. Land values can increase exponentially over the years and you also have the opportunity to develop and rent out the land.

In this article, I go into deeper detail about how it works when buying land in Malaysia.

Topics covered in this article:

  • Can foreigners buy land in Malaysia?
  • General Conditions when Buying Land
  • Can I reduce the minimum investment requirement?
  • What land categories exist in Malaysia?
  • The process when Buying Land in Malaysia
  • Can I get a loan to buy land?
  • Are there other Asian countries where I can buy land?
  • Land titles in Malaysia

Can foreigners buy land in Malaysia?

Malaysia is the only Southeast Asian country where foreigners can directly buy and own land. I don’t count Sentosa Cove in Singapore as the area is small and land prices obscure. Continue reading How to Buy Land in Malaysia: A Complete Guide

Malaysia Property Market Outlook 2021: A Complete Overview

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Malaysia is one of the most foreign-friendly countries in Southeast Asia for real estate investors. Here, you have access to almost any kind of property types and you can even buy land.

Having said that, if you plan to buy real estate in Malaysia, you must understand how healthy the market is and what to expect for the coming year.

In this article, I explain what my projection is for Malaysia’s property market in 2021, based on the current climate and historical data.

First, we review how the market performed in the past years and continue with a market outlook for 2021.

Topics covered in this article:

  • Malaysia’s Property Market in Previous Years
  • Why has Malaysia’s property market performed badly?
  • Most Expensive Cities to Buy Property in Malaysia
  • Cheapest Cities to Buy Property in Malaysia
  • Market Outlook for 2021

Malaysia’s Property Market in Previous Years

Malaysia’s property market has been in decline since 2012 and we’ve seen modest price increases. Continue reading Malaysia Property Market Outlook 2021: A Complete Overview

Investing in Malaysia Hotels: A Complete Guide

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Malaysia is the home to several popular tourist destinations, including Kuala Lumpur, Penang, Perhentian Island, Tioman Island, Langkawi, and Redang Island.

With almost 30 million visitors yearly, Malaysia continues to attract everything from foreign retirees who opt-in for the MM2H visa, medical tourists, and travelers.

Malaysia further tries to boost tourism, for example, through its Visit Malaysia 2020 program. Unfortunately, the government couldn’t pursue this plan due to the COVID-19 crisis.

But we will most likely see a rebound once the market opens again.

Topics covered in this article:

  • Can foreigners buy hotels in Malaysia?
  • Regulations and Licensing of Hotels
  • The Malaysian Hotel Industry
  • Best Cities for Hotel Investments in Malaysia

Can foreigners buy hotels in Malaysia?

Malaysia has some of the most relaxed foreign property ownership regulations in Southeast Asia. Continue reading Investing in Malaysia Hotels: A Complete Guide

Buying Commercial Property in Malaysia: A Complete Guide

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Malaysia is a comparably developed country by Asian standards and has some of the most favorable foreign ownership regulations in the region. This goes for both residential and commercial real estate.

Worth mentioning is also that Malaysia’s REIT market gets increasingly popular among local and foreign investors who want to diversify their investments.

With that said, today we focus on investments in commercial real estate and if this is even available to foreigners and locals.

Topics covered:

  • Can foreigners buy commercial property in Malaysia?
  • Commercial Property Types Available for Foreigners in Malaysia
  • Getting a Commercial Property Loan in Malaysia
  • Commercial Property Taxes
  • How can I find commercial property in Malaysia?
  • Best Cities in Malaysia for Commercial Property Investments

Can foreigners buy commercial property in Malaysia?

Malaysia is well-known for being one of the most foreign-friendly countries in terms of property ownership regulations.

You have no particular restrictions to buy residential property and commercial property, you only need to deal with some minimum investment requirements.

Besides, some land types are reserved for Bumiputera only.

When it comes to commercial property, the minimum investment requirements don’t apply to the whole of the country, but in places where the buying pressure is higher, like in Kuala Lumpur and Penang.

Foreigners have no issues buying office space, industrial real estate, and hotels. That’s not the case in countries like Thailand, Vietnam, and Cambodia where you have to set up a local company to buy commercial real estate.

Commercial Property Types Available for Foreigners in Malaysia

Malaysia has a diverse economy and there are plenty of options available for foreigners who want to invest in commercial property.

Let’s have a look at the most common options and what makes each interesting.

buying-commercial-property-malaysia

Office Space

You have two options when buying office space in Malaysia: Strata-titled units or units with individual titles. The first option is generally a bit cheaper and means that you co-own common areas.

You can find many interesting objects in places like Kuala Lumpur, a city that continues to expand and with much potential in the future. Being a top tier city worldwide, prices are still surprisingly low, something we’ve seen for residential property as well.

Office space prices in the prime areas go for almost as little as 10% (!) compared to Hong Kong, rentals are also significantly cheaper.

Deciding whether to buy or lease office space depends highly on your goals. Maybe you’re an investor who simply looks for capital gains or a business owner who’s been renting for a couple of years and wants to buy.

Below I’ve included some pros & cons when buying and leasing.

Pros of buying an office instead of leasing

  • You can enjoy the capital appreciation
  • You can deduct costs for maintenance and taxes
  • You can rent out the office space and earn rental incomes
  • As mentioned, office spaces are cheap in Malaysia
  • Higher rental income
  • Longer lease period

Cons of buying an office instead of leasing

  • Relies heavily on the economic climate
  • Not very liquid
  • Higher interest rates
  • The problems of moving to a new office quickly, if your company outgrows the old office

Retail Property

Buying retail property is a different story compared to buying a residential property. The same as it goes with office spaces, retail property highly relies on the economic climate. A downturn in the economy might result in lost income, forcing you to leave.

Also, in comparison to buying a residential property, you normally want to buy in locations where there’s a large number of people in circulation. Congested areas might not necessarily be an issue, but something you normally want to avoid when buying a residential property.

The same as it goes with office spaces, there’s currently an oversupply of retail property, at least in the major cities. The growing e-commerce industry should be taken into consideration if you decide to sell retail products in physical stores.

Industrial Real Estate and Warehouses

Investing in industrial property has become increasingly popular in Malaysia, especially among wealthier investors. Some of the reasons are:

  • Industrial activity is increasing. With the weak ringgit, the demand for exports increases
  • The local population will also increase much the coming decades, driving up the demand for local products
  • The competition for industrial property is lower, as prices are generally higher
  • Tenants are often serious and determined to lease industrial property for a longer time. There’s a greater amount of time, money, and work needed to set up the facilities and inventories
  • Supply of industrial property is scarce in comparison to other property types

The importance of location when choosing industrial property

The same as it goes with retail property, the location is of high importance when buying industrial property. A key consideration is to buy close to harbors or airports, to reduce hauling costs.

These costs are determined based on the distance to your premises, from the airport or harbor. The height from the floor to the ceiling and the space of the facility should also be studied well in advance.
Getting a Commercial Property Loan in Malaysia

It’s possible to get a loan for commercial property, but the requirements and down payments are generally tougher compared to residential property. There’s more scrutiny and banks have tougher requirements.

Some items that banks take into consideration before lending for commercial property include:

  • What type of property you plan to buy
  • Why you want to buy (business purpose)
  • The location of the property
  • The floor which the property is located on
  • Others

Worth mentioning is that it’s significantly easier to get a home loan in case you have the so-called MM2H visa or work and reside in Malaysia.

Process when applying for commercial property loans

  • Find a handful of banks that are willing to offer you a loan. Compare the different options and what suits you best (including repayment period, and interest rates)
  • Prepare the documents needed, usually involving proof of identity (passport), proof of your residential and legal status in Malaysia, financial proofs, and more
  • Get an approval-in-principle, which will make sure that you have your finances covered. The last thing you want to do is to bid on a property without being backed financially
  • Find an agent and a solicitor, to help you through the conveyancing process
  • Prepare the initial deposit, usually set to 2-3%. This will be used as evidence to the bank that you want to proceed with your purchase
  • Continue the payment of the installments and be prepared to pay an additional 7-10% of the sales amount before signing the Sales & Purchasing Agreement (SPA)
  • Finalize the mortgage and the remaining payments within 3 months

Commercial Property Loan Calculators

Many people seek convenience and look for so-called loan calculators online. These tools can easily calculate different rates from banks with just the click of a button.

Websites that offer this online tool include:

  • Realproperty.my
  • Calculator.com.my
  • Propertyguru.com.my

You can try to use the tools on each website and see what’s best for you.

Commercial Property Taxes

The same as for residential property, you need to pay real estate taxes when buying, holding, or selling commercial property.

The taxes are similar, but the rates differ from time to time. Below I’ve listed the taxes you normally need to pay when investing in Malaysia commercial property.

Stamp Duty

The stamp duty increases progressively as follows:

  • RM 0 – 100.000 = 1%
  • RM 100.001 – 500.000 = 2%
  • > RM 500.001 = 3%

You normally need to add a legal fee as well, ranging between 0.4-1%.

GST

The same as it goes for commercial property in Singapore, Malaysia has a so-called Goods and Services Tax (GST). You need to pay GST in case you fall under any of the below descriptions:

  • You have more than 2 commercial properties
  • You have more than one acre of land
  • The market value of your properties exceed RM 2 million (around USD 500.000)
  • Your taxable amount exceeds RM 500,000 during the actual month and the following eleven months

Quit Rent

Quit rent is only charged to landowners once a year, but the amount is negligible and around USD 10-20 USD/year for residential property. The rate is USD 20 – 50 for commercial property.

Assessment Tax

I’ve already explained about assessment tax in my separate article about buying a residential property. The assessment tax is similar to property tax and paid annually. The rate is normally 4% for residential property and around 10% for commercial property.

Real Property Gain Tax (RPGT)

Capital gains tax is referred to as RPGT in Malaysia and differs depending on your holding period and whether you buy residential or commercial property. Your residential status will also affect the rates that apply.

RPGT increases progressively as follows for commercial property:

  • If sold within 3 years: 30%
  • If sold before 4 years: 20%
  • If sold before 5 years: 15%
  • If sold after 6 years: 5%

How can I find commercial property in Malaysia?

Before you invest in commercial real estate, you have to find a real estate agent that can help you to find a suitable unit and connect you with the buyer.

You have plenty of real estate agencies and listing sites to choose among if you want to buy commercial property in Malaysia. Some of the most popular listing sites include:

  • iProperty
  • Commercialguru
  • Knightfrank
  • Edgeprop
  • JLL

Asia Property HQ also works with leading partners that have a long experience of catering to foreign clients who are interested in acquiring property in Malaysia. Simply fill in the form at the bottom of this article and then we can help you.

Best Cities in Malaysia for Commercial Property Investments

Malaysia is the home to many industrialized and developed cities and areas, including Kuala Lumpur, Johor Bahru, Penang, Ipoh, and Klang Valley.

Kuala Lumpur is the financial heart of Malaysia and where most commercial activity is going on. Not surprisingly, it’s also growing the fastest in the country. Therefore, many investors find this place the most interesting.

Some areas you should have a look at in KL include:

  • KL Sentral
  • KLCC
  • Bukit Bintang
  • Mid Valley City
  • Tun Razak Exchange (TRX)

That said, according to Knight Frank, the commercial property segment (including office space and retail space) will be most interesting in Klang Valley and Johor. Looking at the hotel sector, Penang and Sabah are becoming increasingly interesting.

Sabah has a cultural diversity and unique natural environment which makes it an attractive destination among travelers and holiday spenders. In 2018, as many as 3.8 million travelers visited the city.

Worth mentioning is also that Klang Valley becomes increasingly interesting for manufacturing operations and we will see more foreign direct investment here.

Negeri Sembilan and Pahang are two upcoming destinations that get more attention from commercial property investors as well.

FAQ

Below you can find some commonly asked questions among investors and our replies.

Can Singapore PR own property in Malaysia?

Yes, Singapore permanent residents are not treated in a different way than other foreigners. Malaysia allows foreigners to acquire everything from office space, industrial real estate, hotels, and retail property.

What are the benefits of buying a property through a company?

Buying commercial property through a local company offers many benefits in Malaysia. First, you have the tax benefits. Corporate tax is set at a flat rate of 20%. If you exceed the 20% bracket for your income tax, you can save on taxes. Besides, there are more deductibles available.

If you are the director of an Sdn. Bhd. (Sendirian Berhad) or LLP (Limited Liability Partnership), you are not subject to the minimum investment requirements either.

Is property a good investment in Malaysia?

Malaysia is one of the easiest countries in Asia to buy a property. Here, foreigners can get hold of land, villas, apartments, and commercial property. Rental yields are still fairly high in places like Kuala Lumpur and Malaysia continues to be an attractive country for overseas investors.

The only drawback of investing here is that foreigners have to meet the local minimum investment requirements that differ by state.

Conclusion

You have many advantages when buying commercial property in Malaysia. Neither is the market as competitive as the residential ditto, capital appreciations and rental incomes are also generally higher.

But the market is also more volatile, relying more heavily on the economic climate. A downturn in the economy might result in difficulties to keep the property. This is something banks understand, a reason why it’s generally more difficult to get mortgages for commercial property.

You need to pay similar taxes, the only main difference is the GST, which applies to commercial property. The tax rates also differ, for example, the stamp duty.

Most commercial activity is in Kuala Lumpur, Johor Bahru, Penang, but not excluding, Melaka, Ipoh and Kota Kinabalu, where commercial activity increases steadily.

List of Serviced Apartments in Kuala Lumpur: Our Top 8 Picks

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Serviced Apartments in Kuala Lumpur

Are you looking for a serviced apartment in Kuala Lumpur?

Whether you are planning for a business or leisure trip, a serviced apartment is a flexible solution that offers you a comfortable and convenient living experience.

Read this article to learn more about our top 8 picks serviced apartments in Kuala Lumpur. We compare them according to their unit size, rent span, duration of stay, location, amenities, and services.

Overview

Benefits of renting a serviced apartment in Kuala Lumpur

The first benefit is that you don’t have to necessarily commit to a long term contract, let’s say 6 to 12 months. The same also happens in other cities such as Singapore and Bangkok, where serviced apartments companies are open to a shorter rent span.

Second, bills such as electricity, water, and internet are usually included in the rent. Also, most serviced apartment companies offer a free housekeeping service as 2 to 3 times per week.

Finally, a serviced apartment provider usually offers “luxury” facilities and services, such as a swimming pool, gym, spa, business center, transportation service, and babysitting service.

Serviced apartment rents in Kuala Lumpur

Kuala Lumpur is the capital of Malaysia, and it is also one of the busiest cities in the world.

Thus, the city has a well-developed hospitality industry; at the same time, accommodation prices are usually higher when compared to other cities in Malaysia, especially when it comes down to hotels.

According to Numbeo, the average rental prices for a “normal” apartment in the city center is around RM 2,300 per month; however, a studio suite in a hotel usually costs RM 200 to 500 per night (that is RM 6,000 to 15,000 per month).

Conversely, a serviced apartment offers a relatively lower rental price that ranges from RM 90 to 350 per night (or RM 2,700 to 10,500 per month) for a studio suite.

Note that, you can get up to a 20-40% discount if you decided to book a room for more than a month. This is common in many Asia countries, while Hong Kong is one of the exceptions.

Continue reading List of Serviced Apartments in Kuala Lumpur: Our Top 8 Picks

Top 10 Property Developers in Malaysia: A Complete Guide

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Foreign investors primarily look for big and reputable developers when buying overseas property.

The Chinese, for example, are known for doing much research about developers before even visiting a country.

Truth be told, failing to do enough research can result in late completions, quality issues, or that the developer runs into financial problems. Not to forget, developers have their own unique style and brand names.

Fortunately, you can find plenty of internationally recognized developers in Malaysia.

Many have dozens of projects completed and are in the process to complete modern infrastructure projects, big innovative projects, and mega housing complexes.

In this article, I’ve listed some of the biggest and most popular property developers in Malaysia.

1. Eco World Development Group

EcoWorld Development Group was not known to many Malaysians a decade back. That said, it’s seen tremendous growth over the past years and is now a big award winning developer in Malaysia.

Continue reading Top 10 Property Developers in Malaysia: A Complete Guide

Apartments for Sale in Kuala Lumpur: 9 Interesting New Projects

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Kuala Lumpur is the capital and financial center of Malaysia, offering some of the best property investment opportunities for overseas buyers. Being an alpha city, you’ll notice that property is still surprisingly cheap, with prices similar to those in Bangkok.

In this listing article, you can read about interesting new condos and apartments in Kuala Lumpur. We update the article continuously, trying to give you the latest information.

If you have any recommendations or information about new projects, feel free to contact us and we will do a review.

Viewing the projects and surrounding areas in Google Maps (Street View)

To check the projects and surrounding areas in Street View, simply zoom in the area of the marker and pull the orange-colored Pegman to the marker, or nearby areas. To go back to Google Maps, press the arrow in the top left corner.

Projects Covered

Continue reading Apartments for Sale in Kuala Lumpur: 9 Interesting New Projects