Rising costs, regulation fuel strategic consolidation in Malaysia's data centre market: JLL
JLL Malaysia data centre transactions, capital markets manager Sum Chun Kit said this transition would favour high-quality operators over speculative players as cost and regulatory pressures mount.
"This is a healthy trend in a maturing market. Rising costs across the development chain, including water and electricity tariffs, are expected to increase by 10 per cent to 20 per cent.
"These pressures would filter out players who are not optimising efficiency," he said during JLL's Second Quarter (2Q) 2025 Market Dynamics Report briefing today.
He noted that higher utility charges, while challenging, could ultimately benefit the broader ecosystem.
"Charging higher tariffs allows energy providers like Tenaga Nasional Bhd to recover more revenue and reinvest in infrastructure upgrades, leading to better stability and service for all users," Sum said.
Other cost pressures include rising land prices, construction materials, and tighter regulations involving authority approvals, as well as the expanded scope of the sales and service tax.
Moving forward, Sum expected the consolidation trend to continue, especially for operators unable to demonstrate efficient use of water and power, among the two critical resources for data centres.
Despite this, demand for data centres remains strong in key areas, with continued interest around Johor Bahru, established hubs in the Klang Valley, and emerging zones such as Nilai and Port Dickson in Negeri Sembilan.
"Like any business or real estate sector, the data centre market also moves through cycles. What we are seeing now is part of that natural evolution," he said.
Meanwhile, JLL Malaysia research and consultancy head Yulia Nikulicheva said that strategic partnerships with local authorities are increasingly important in expediting infrastructure upgrades and project approvals.
"Malaysia's data centre market is in a consolidation phase, backed by solid numbers – 638 megawatts (MW) of completed capacity, 1,300 MW under construction, and over 3,450 MW in the pipeline," she said.
At the same event, JLL Malaysia also launched the Malaysia Property Intelligence Centre (MPIC) – an interactive analytics platform aimed at transforming how industry players access, visualise, and interpret real estate data.
"In today's fast-paced real estate environment, access to accurate, real-time market intelligence is essential, not optional.
"MPIC transforms raw data into strategic insights, giving our clients a decisive edge in an increasingly complex marketplace," Nikulicheva said.
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New Straits Times
2 days ago
- New Straits Times
Rising costs, regulation fuel strategic consolidation in Malaysia's data centre market: JLL
KUALA LUMPUR: Malaysia's rapidly growing data centre sector is now entering a consolidation phase, a natural progression observed in more mature markets, according to global commercial real estate firm JLL. JLL Malaysia data centre transactions, capital markets manager Sum Chun Kit said this transition would favour high-quality operators over speculative players as cost and regulatory pressures mount. "This is a healthy trend in a maturing market. Rising costs across the development chain, including water and electricity tariffs, are expected to increase by 10 per cent to 20 per cent. "These pressures would filter out players who are not optimising efficiency," he said during JLL's Second Quarter (2Q) 2025 Market Dynamics Report briefing today. He noted that higher utility charges, while challenging, could ultimately benefit the broader ecosystem. "Charging higher tariffs allows energy providers like Tenaga Nasional Bhd to recover more revenue and reinvest in infrastructure upgrades, leading to better stability and service for all users," Sum said. Other cost pressures include rising land prices, construction materials, and tighter regulations involving authority approvals, as well as the expanded scope of the sales and service tax. Moving forward, Sum expected the consolidation trend to continue, especially for operators unable to demonstrate efficient use of water and power, among the two critical resources for data centres. Despite this, demand for data centres remains strong in key areas, with continued interest around Johor Bahru, established hubs in the Klang Valley, and emerging zones such as Nilai and Port Dickson in Negeri Sembilan. "Like any business or real estate sector, the data centre market also moves through cycles. What we are seeing now is part of that natural evolution," he said. Meanwhile, JLL Malaysia research and consultancy head Yulia Nikulicheva said that strategic partnerships with local authorities are increasingly important in expediting infrastructure upgrades and project approvals. "Malaysia's data centre market is in a consolidation phase, backed by solid numbers – 638 megawatts (MW) of completed capacity, 1,300 MW under construction, and over 3,450 MW in the pipeline," she said. At the same event, JLL Malaysia also launched the Malaysia Property Intelligence Centre (MPIC) – an interactive analytics platform aimed at transforming how industry players access, visualise, and interpret real estate data. "In today's fast-paced real estate environment, access to accurate, real-time market intelligence is essential, not optional. "MPIC transforms raw data into strategic insights, giving our clients a decisive edge in an increasingly complex marketplace," Nikulicheva said.
New Straits Times
5 days ago
- New Straits Times
Rate cut to spur moderate demand in property sector, say analysts
KUALA LUMPUR: The cut in the Overnight Policy Rate (OPR) by Bank Negara Malaysia (BNM) will spur moderate demand for properties in general in the second half (2H) of this year while demand in the high-end segment will continue to be robust, analysts say. They contend that the lower benchmark lending rate, together with infrastructure growth and incentives for developers, will maintain the property market's resilience with stable price trends amid a cautiously optimistic outlook. JLL Malaysia managing director Jamie Tan told Bernama that stable economic conditions, wealth preservation strategies and attractive incentives have encouraged upgraders and investors to remain active despite the cautious sentiment in the broader market. Nevertheless, analysts contend that it is an opportune time for buyers. Although price softening is seen in some high-end urban pockets, they believe overall sentiment has improved, particularly in infrastructure-connected zones and prime city areas. Nevertheless, real estate experts said they notice the rate cut has led to a noticeable increase in property viewings and home loan inquiries, which could boost buying sentiment especially in the mid-range segment. Luxury Homes Defy Downtrend Despite a general slowdown in the overall real estate market in the first quarter (1Q) of this year, the high-end segment demonstrated greater resilience. This was evident by the 5.6 per cent year-on-year increase in transactions for properties priced above RM1 million, according to the National Property Information Centre (Napic). While the overall volume and value of property transactions declined by 6.2 per cent and 8.9 per cent respectively, demand for luxury homes in Kuala Lumpur, Penang, and Johor Bahru remained firm, driven by affluent buyers seeking high-quality developments in prime locations. Prices Holding Steady in Urban Centres Tan said residential prices across Malaysia's major urban centres remained steady, with modest gains recorded across key segments. In the Klang Valley, serviced apartments and condominiums saw price increases of between 1.8 and 2.3 per cent, while double-storey terrace home prices rose 1.4 per cent. "These figures reflect sustained demand and market stabilisation following the post-pandemic recovery," he said, adding that balanced new supply and consistent buyer demand have supported price stability. IQI co-founder and chief executive officer Kashif Ansari expressed optimism the current market overhang at about 4.8 months of sales volume is still relatively healthy, especially compared with countries like the United States (US), where overhang rates hover around 10 months. Affordability Challenges for Mass Market Kashif said in contrast, the sub-RM500,000 market faced more significant challenges. Transaction volumes and values in this price segment declined, reflecting affordability pressures and cautious spending among mass-market buyers. "While many buyers are financially stable, factors like rising living costs and stagnant wages continue to weigh on sentiment," he said. To address affordability gaps, Kashif said developers and policymakers must focus on boosting supply in the RM200,000 to RM500,000 range, where demand is high but product availability remains limited. Improved Overhang Situation, But Strategic Supply Needed Residential overhang rates, while improving, still warrant attention. According to JLL, overhang rates stood at 23 per cent in Selangor and Johor and 19 per cent in Kuala Lumpur as of the second quarter (2Q) of 2025, marking improvements from pandemic-era peaks of 63 per cent in 2020-2021. "Not all unsold stock is equal. Properties with strong locations, connectivity and design features continue to attract buyers, while poorly located or overbuilt units struggle," Tan said. Competition among developers remains intense, with many offering incentives to boost sales without officially cutting prices. These include price rebates, renovation packages, legal fee absorption and even lifestyle perks like travel vouchers. OPR Cut Sparks Renewed Buyer Interest BNM's OPR cut to 2.75 per cent on July 10, after about two years of no change, has boosted buyer sentiment. While the OPR rate remained unchanged at 3.0 per cent since May 2023, the latest cut is seen as an opportune time for homebuyers to enter the market. Real estate experts reported a noticeable increase in property viewings and home loan inquiries following the rate cut. "This reduction improves affordability. A borrower financing a RM500,000 home could save around RM66 per month, adding up to RM23,000 over a 30-year loan. That's a tangible incentive," said Kashif. In combination with developer incentives, the rate cut is expected to revive activity particularly in the mid-range market, where value-for-money is key. However, he said that the property market remains sensitive to broader economic conditions. External shocks such as geopolitical tensions, policy instability, or global economic slowdowns could dampen momentum. Infrastructure as a Growth Catalyst On the other hand, infrastructure continues to play a key role in driving property values. Homes located near public transport networks such as Mass Rapid Transit (MRT) and Light Rail Transit (LRT) stations, consistently outperform the broader market. Citing a study by Universiti Pendidikan Sultan Idris, Kashif said that properties within 400 metres of MRT stations on the Sungai Buloh-Kajang (SBK) line sold at a 9.5 per cent premium post-completion, about RM99,900 more than the citywide average. Tan, meanwhile, also cited transit-oriented developments, which would benefit from long-term desirability, making it attractive even in softer market conditions. "Connectivity drives footfall, rental demand and capital values. Investors perceive infrastructure-rich areas as lower-risk and higher-return zones," said Tan. Johor's Transformation Boosting Values Johor is emerging as a standout market, driven by the Johor-Singapore Special Economic Zone (JS-SEZ) and the upcoming Rapid Transit System (RTS) Link. These mega-projects are spurring development interest and price growth. As of 2Q 2025, serviced apartment prices in strategic areas such as Bukit Chagar and the Customs, Immigration and Quarantine complex have surged by up to 20.4 per cent. New projects are fetching prices of RM1,500 per sq ft and above – levels previously limited to Kuala Lumpur's Golden Triangle. "Johor's cross-border connectivity is a powerful magnet for both developers and investors," Tan said. Towards Holistic, Livable Development Looking forward, analysts emphasised the importance of holistic urban planning and inclusive housing strategies. "Developers must align their projects with real community needs, not just profit margins," said Tan. This includes better coordination with local councils, sustainable design and ensuring access to amenities, public transport and green spaces. Kashif echoed the call, adding that a stable property market should prioritise accessibility, housing quality, and long-term livability, not just price performance. Regulatory clarity and streamlined approval processes are also key to maintaining investor confidence. Tan urged more consistent guidelines from federal and local authorities to avoid delays and uncertainty. He lamented that "frequent policy changes discourage long-term planning and add costs to development." To spur affordable housing, both experts recommended refining the Home Ownership Campaign, introducing tax incentives for affordable housing developers and avoiding haphazard launches that could flood the market. He cautioned that without proper planning, "we risk another overhang situation." Positive Overall Outlook for Property Sector While Malaysia's property market faces challenges in affordability and oversupply in some segments, the overall outlook remains positive. Stable economic conditions, supportive monetary policy, infrastructure development and a responsive developer ecosystem are helping to maintain resilience. With targeted policy support and careful supply alignment, 2Q 2025 could see renewed momentum, especially in the mid- and high-end segments that deliver both value and connectivity.
Free Malaysia Today
10-07-2025
- Free Malaysia Today
Pakistan eyes US$1bil valuation in Roosevelt Hotel redevelopment plan
Faced with mounting losses, the Roosevelt Hotel was shut in 2020 and has also operated briefly as a migrant shelter. (Infobae pic) KARACHI : Pakistan is seeking a valuation of at least US$1 billion for the Roosevelt Hotel it owns in New York and is ready to part with a minority stake in the prime Manhattan property as it scouts for a redevelopment partner, a senior government official said. Named after former US president Theodore Roosevelt, the century-old property in midtown Manhattan is seen as one of Pakistan's most valuable foreign assets, which it acquired in 2000. Faced with mounting losses, the over 1,000-room hotel was shut in 2020, and has also operated briefly as a migrant shelter. As part of the government's US$7 billion IMF-backed privatisation push, Pakistan's government approved a 'transaction structure for the Roosevelt Hotel' on Tuesday, saying it won't do an outright sale but has decided to adopt a joint venture model to maximize long-term value. It gave no further details. The senior Pakistani official said the government will retain ownership in the project through an equity partnership, but declined to disclose the size of the stake being offered to any potential JV partner. The official declined to be named since the process is confidential. JLL, or Jones Lang LaSalle, will run the process and the government is eyeing a valuation of over US$1 billion for the 42,000 square feet property it hopes could be redeveloped for residential-cum-office use, the official said. 'It is among the best pieces of land in NY real estate … The process begins immediately and is expected to be completed in the next six-nine months,' said the official. Pakistan's Privatisation Ministry and state-owned Pakistan International Airlines (PIA), which owns the hotel through its investment arm, did not respond to request for comments, and neither did JLL. Pakistan this week also approved four parties to bid for a stake in debt-ridden PIA. The hotel is located near marquee New York destinations such as Grand Central Terminal, Times Square, and Fifth Avenue, placing it in one of Manhattan's most valuable commercial zones. Pakistan's government is estimating the redevelopment will take 4–5 years, the official said, adding the 'interest level is extremely high.' In June, the government said it expects US$100 million in the initial payment from the joint-venture partnership by June 2026.
