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Chinese investors are increasingly turning their attention to Malaysia as they seek stable and high-quality investment assets, particularly in the commercial real estate sector.
Malaysian commercial properties are particularly appealing to Chinese investors due to their universal foundations that are easily understood across borders. Property investments offer attractive opportunities for Chinese investors to make competitive offers, especially in the current period of higher interest rates, thanks to their access to readily available capital.
Malaysia's strong economy presents various investment opportunities for Chinese investors, including developable land, tourism facilities, industrial parks, data centres, and industrial and logistical infrastructure. Compared to other regions such as North America or Europe, obtaining investment approvals in Malaysia is relatively straightforward for Chinese investors.
Chinese investments in Malaysia have already reached over US$38 billion, potentially accounting for 10% of Malaysia's GDP in 2021, which was approximately US$373 billion.
Recent studies conducted by Juwai IQI show that Malaysia has positioned itself as one of the top five choices for Chinese commercial property investors. In 2022, Malaysia secured a third-place ranking as a preferred investment destination for Chinese investors seeking commercial properties, surpassing previous years. There has been a noticeable decrease in Chinese outbound commercial real estate investments, with a shift towards Malaysia and other Southeast Asian countries as favoured investment destinations. Indonesia and Thailand have also witnessed increased interest from Chinese investors.
Within Malaysia, key destinations for Chinese commercial property investors include Johor, Kuala Lumpur, and Selangor. Johor stands out due to its relatively developed economy and its proximity to Singapore. The ongoing construction of the Johor Bahru-Singapore Rapid Transit System (RTS Link) is expected to further boost investment prospects in Johor as it connects the two regions. It is anticipated that Johor will continue to attract more investments, especially from Singaporean and Chinese investors seeking higher returns, desirable lifestyles, and affordable options. Kuala Lumpur and Selangor, as Malaysia's primary urban and business centres, are also sought-after destinations for Chinese commercial property investments.
With projections indicating a significant surge in demand for commercial real estate, Juwai IQI predicts that by 2030, around 50,000 more individuals may adopt a cross-border lifestyle between Johor and Singapore, further stimulating investment opportunities in the region.
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