Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Monday, October 12, 2009

Positive Q4 outlook for construction

KUALA LUMPUR: The outlook for the domestic construction sector looks positive in the fourth quarter, but the roll-out of major projects will likely only happen next year, analysts and industry players said.

Ng Kee Leen ... 'Developers must be market driven'.

Master Builders Association Malaysia (MBAM) president Ng Kee Leen said there was certainly greater optimism of a revival in the construction sector, thanks mainly to the Government’s stimulus packages and overall improvement in the global economy.

“We are definitely seeing more tenders and small public works jobs being dished out in recent months, but most of the bigger or mega projects are likely to be rolled out next year,” he told StarBiz recently.

The construction sector grew 1.1% in the first quarter but contracted 2.8% in the second.

“We expect the third and fourth quarter results to be positive,” he said, adding that the construction sector’s growth for the whole of 2009 could be 3%.

For 2010, Ng said “barring unforeseen circumstances, the construction sector’s gross domestic product should be better than this year’s 3% forecast, but definitely well below the highs seen in early 2000 when it was hovering around 6% to 7%.”

The construction sector remains attractive, especially since material costs such as sand, steel and cement prices have stablised, he said.

However, Ng advised construction players, especially developers in the sector, to not just build “more of the same” and expect the market to mop up whatever they build.

“Developers must be market driven to build projects that are wanted by the community,” he said, adding that there was now more interest in energy-saving buildings that embraced the green concept.

According to Ng, the construction sector’s yearly turnover was around RM60bil.

“About 50% of this turnover are from government projects and the balance from private initiated investments,” he said, adding that much of the government spending was for infrastructure development, including road works.

Ng noted that developers were also more confident of the property sector’s growth, with some unlisted ones like GSB Sentral Sdn Bhd, a member of the diversified Gapurna Group, having already started groundworks on its 348 Sentral development – a green property project with a gross development value RM1.1bil to be completed 2012.

GSB Sentral director Imran Salim said the company was very confident of the project’s success going by the 60% uptake of floor space of the building by its main tenant – Shell Malaysia.

Datuk Osman Abu Bakar, the secretary-general of the Malay Contractors Association which represents some 7,000 bumiputra contractors, said many of the projects dished out so far by the Government were for smaller projects.

“There are more tenders and small construction projects out these days and our members have benefited from these projects as our members are mostly Class F contractors,” he said.

A member of the Indian Contractors’ Association said he had benefited from the Government’s simulus packages.

“Most of the contracts we’ve secured are small roadworks projects. However, our company has not derived any benefits or jobs from mega projects,” he said.

A construction analyst with OSK Research concurred that the construction sector was on the road to recovery and that players in the market, from developers and contractors to real estate agents, were definitely more optimistic of the sector’s growth going forward.

“There are more property launches by developers and more tenders this third and fourth quarters. This is a good sign. But many contractors are waiting for more mega projects to be rolled out, which we suspect will occur next year,” he said.

The billion-ringgit projects that are likely to be rolled out or have been confirmed include the RM9bil Pahang-Selangor interstate raw water transfer project, the RM7bil Kelana Jaya and Ampang light rail transit line extension works and the construction of the low-cost terminal, according to the OSK analyst.

A construction analyst from another brokerage said that while there were early signs that the construction sector was recovering, the rollout pace of major projects remained slow.

“Also, now that the global economy appears to be on the mend, we wonder if the mega projects proposed when the economy was in a downturn will be implemented,” the analyst said.

“Granted mega projects implemented can help boost significantly the construction sector, but government funds on smaller infrastructure projects such as those in east Malaysia can also have significant impact on the overall health and resilience of the Malaysian economy, besides the construction sector, over a longer term.”

By The Star (by Danny Yap)

1 comment:

Portable Storage said...

Thanks for the article.Your article was pretty informative and i hope that in future also i get these kind of article.

Portable Storage,