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Tuesday, September 2, 2008

New investment wave to hit Malaysia

Deals with overseas investors believed to be for land acquisitions in growth corridors

UP TO RM4 billion of foreign direct investment (FDI) is expected to flow into the country over the next six months as more investors see Malaysia as a good investment destination amid concern over a global economic slowdown.

Its transparent laws on land matters, wide use of the English language and value-for-money destination make the country attractive, an industry observer said.

Business Times understands that the inflow of FDI will come from the Middle East, South Korea, Hong Kong, China and Taiwan, and is for land acquisitions in the growth corridors, including the Klang Valley.

The deals are believed to be brokered by a local property firm with international interest.

"These new foreign investments could translate into a gross development value (GDV) exceeding RM15 billion," a source close to the deals told Business Times.

It is learnt that a Korean developer has acquired 0.4ha in Jalan Kia Peng, Kuala Lumpur, for RM2,500 per sq ft to build a luxury one-block residence for around RM1 billion.

"The land was acquired at a record price. The residences will be a stunning landmark within the Kuala Lumpur City Centre enclave and may break the record for prices of high-end products.

"The developer aims to sell the units to Koreans and locals," the source said.

The Iskandar Malaysia growth corridor in Johor, which has attracted RM33 billion in investments, or 70 per cent of the Johor state government's target of RM47 billion to date, is also experiencing a new wave of investments.

The source said that more investments were expected to come from the United Arab Emirates, Qatar and Bahrain as investors look for prime properties like condominiums and offices in south Johor and in KLCC and Mont' Kiara, Kuala Lumpur.

Companies from the Middle East - such as Kuwait Finance House, Aldar Properties, Mubadala Development Co, Millennium Development Co,Damac Properties and Limitless Dubai - are already investing in Iskandar Malaysia.

Sabah, which is experiencing a mini-boom after the launch of the Sabah Development Corridor earlier this year, is attracting investors from South Korea, Hong Kong and Taiwan.

Some RM500 million worth of investment is expected to be made by the first quarter of next year for resort and the broader property development," the source added.

By New Straits Times (by Sharen Kaur)

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