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Saturday, July 25, 2009

Malaysian Property Inc sets RM20b target

Malaysian Property Inc (MPI), a government-private sector initiative to woo foreign direct investment (FDI) into local real estate, has set a target of RM20 billion over the next 10 years.

Formed late last year, the tie-up will have an initial fund of RM50 million over five years to brand and market Malaysia as an international real estate investment destination.

MPI chairman of the board of governors Tan Sri Thong Yaw Hong said the government has provided a grant of RM25 million and the private sector has to match the amount provided.

The target markets include the UK, West Asia (including the Middle East, India, Bangladesh, Pakistan), Japan, South Korea, Hong Kong, Singapore and Indonesia.

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said Malaysia is an attractive destination given that prime properties in the Kuala Lumpur city centre area are tagged at around US$600 (RM2,124) per sq ft compared with US$2,000 (RM7,080) per sq ft in Singapore and Hong Kong.

Nor Mohamed, who launched the MPI on behalf of Prime Minister Datuk Seri Najib Razak, added that Malaysian structures should also carry its own local brand identity.

Interestingly, FDI in Malaysian real estate at best stood at 2.5 per cent of the value of total properties transacted in the country. This is much lower than other locations in the region where the level is over 30 per cent.

Datuk Richard Fong, the chairman of the board of directors of MPI, said that last year, FDI was only some RM200 million.

He added the task at hand included the need to dispel certain perceptions about Malaysia, especially in relation to policies on real estate.

Since its set-up in December 2008, the MPI team is said to have made headways in organising property fairs in Japan twice, which has led to 30 groups of Japanese investor visiting to view commercial and residential properties.

MPI has also taken local real estate developers to the UK thrice this year, which is expected to have another showcase later this year.

In order to achieve its goal, MPI has forged strategic alliances with the Ministry of Tourism, The Malaysian Industrial Development Authority (MIDA) and The Malaysia External Trade Development Corp (Matrade).

By Business Times (by Vasantha Ganesan)

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