Malaysia continues to captivate Chinese investors, who seek high-quality, investment-grade assets like commercial real estate that provide stable, long-term revenue unlinked to China’s economic cycle, according to Juwai IQI co-founder and CEO Kashif Ansari.
Chinese investors find the strengthening economic ties between China and Malaysia particularly enticing, prompting an uptick in investment interest in Malaysian commercial properties.
“Chinese investors regard real estate as a prime investment category because its universal principles are comprehensible globally,” Kashif remarked. In this higher interest rate era, Chinese investors with immediate capital access can present attractive proposals to sellers.
Kashif stated that Malaysia’s thriving economy offers abundant opportunities, including developable land, tourism facilities, industrial parks, data centres, and industrial and logistical infrastructure. He added that Chinese investors often find it comparatively easier to gain investment approval in Malaysia than in North America or Europe.
Chinese investments, exceeding US$38 billion, could represent around 10% of Malaysia’s GDP of US$373 billion in 2021. Malaysia recorded a record-breaking RM170 billion Chinese investment in April 2023, marked by 19 memorandums of understanding. Prime Minister Datuk Seri Anwar Ibrahim highlighted the development of a high-tech automotive valley in Tanjung Malim, focusing on new energy vehicles, as a notable inclusion.
Juwai IQI’s latest research suggests that Chinese international commercial real estate investment shifts are benefiting Malaysia, reinforcing its position as a top-five destination for Chinese commercial property investors. For the first time in 2022, Malaysia emerged as a top-five destination for such investors and remarkably attained the third-ranked position this year.
“Two significant changes have occurred over the past year. Chinese outbound commercial real estate investment has seen a considerable decline, with investments pivoting towards Malaysia and other Southeast Asian nations, primarily Indonesia and Thailand,” said Kashif. The report also indicated a reduced investment flow to the United States and Australia.
Among Chinese commercial property investors, popular Malaysian destinations include Johor, Kuala Lumpur, and Selangor, with Johor drawing attention due to its developed economy and proximity to Singapore. The ongoing construction of the Johor Bahru-Singapore Rapid Transit System (RTS Link) also adds to its appeal.
“We anticipate increased investment in Johor as the rail link to Singapore nears its 2026 completion,” Kashif noted. Johor’s Singapore connections have already been a significant factor in attracting Chinese investment, and this trend is expected to rise. The RTS is predicted to encourage further spillover investment from Singapore, attracting additional Singaporean and Chinese investors enticed by Johor’s returns, lifestyle, and affordability.
Juwai IQI projects that by 2030, 50,000 additional residents could be living cross-border lifestyles, boosting the demand for commercial real estate. Following Johor, Kuala Lumpur and Selangor are preferred destinations for Chinese commercial property investment.
Despite global economic uncertainty, Kashif expressed confidence in Malaysia’s ability to achieve its projected GDP growth target of 4.7% in 2023. China is Malaysia’s second-largest export market after Singapore, contributing to about 13% of total exports.
“Malaysia’s initiatives to streamline processes and bolster the economy will invite more investment,” Kashif said, predicting that Southeast Asia would benefit from China’s rebound, albeit slower than initially projected.