In its first Sabah Property Market report released on Thursday, it estimated a new supply of 4,318 condominiums to come on stream over the next three years.
“The outlook for the second half of 2014 (H2 2014) will see a handful of new residential projects officially launching. Given a lack of new inventory this year, we expect take up rates to be solid albeit subject to affordability and the availability of end financing to buyers,” it said.
The report reviews the high-end residential, office and retail markets in Kota Kinabalu in 2014 and gives an outlook for H2 2014.
According to Knight Frank Malaysia, the Kota Kinabalu property market remained buoyant and stable during the first half of 2014 despite recent negative factors.
The primary factors are the tightening of mortgage lending, tariff hikes on electricity and fuel, and the impending implementation of a goods and services tax (GST) in 2015.
On the city’s southern corridor, it expected a significant transformation with the completion of major projects this year including Imago shopping mall, The Loft apartments, Oceanus waterfront mall, Pelagos Suites, Riverson and Gleneagles private hospital – bringing about a positive impact on the modernisation of Kota Kinabalu.
Knight Frank Malaysia (Sabah Branch) associate director Ginn Lai expects the second half of this year and early 2015 to pick up in terms of new major development launches and announcements, particularly in the new development precincts of the old Jesselton port area and Tanjung Aru Eco Development.
“We are also seeing land scarcity in this city of 351 sq km rapidly placing pressure on land prices and as a result property prices.
“There are no significant landed developments in the pipeline which is attributed to rising land costs and scarcity of land, deterring developers from this sector.
“As a result, future landed property supply is contained outside of 15km from the city centre,” he said.
On the Kota Kinabalu office market, the report found that average occupancy rate was at 91.3%.
Knight Frank Malaysia said there has been no new supply over the 2012 and 2013 period, and we expect the same for this year.
“Pent-up demand for city office space will be met with a significant amount of new supply coming to completion in 2015, most notably Menara Hap Seng, Aeropod, Sutera Avenue and Riverson Suites, totalling approximately 814,613 sq ft – an average 3% new supply per annum,” it added.
Based on current office market values, yields are achieving an average 5% per annum.
The development of purpose built and signature offices continues to see an upward trend and replace traditional shoplots as Kota Kinabalu’s commercial sector matures and modernises.
As for the Kota Kinabalu retail market, the rapid and unprecedented supply of retail malls are coming to completion over the next three years cementing Kota Kinabalu’s position as Borneo’s gateway city.
“Vacancy rates are moderate at 13.7%, predominantly due to tenancy relocations to newer malls coming to completion over the next six months.
“Based on stratified retail unit values, retail yields are achieving between 7% and 9% per annum,” it said.
However, Knight Frank Malaysia cautioned that tenant take-up rates could be slow, but the sector is expected to perform in the mid to long term.
~ By THE STAR
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