KUALA LUMPUR: Sime Darby Bhd via REHDA, is seeking further clarification about the government freezing approval for new applications to build shopping centres, offices, serviced apartments and luxury condominiums in the city centre.
“It is still premature for us to comment on this new ruling by DBKL,” said Sime Darby Property managing director Datuk Seri Amrin Awaluddin.
“We’re seeking further clarification on this via Real Estate & Housing Developers' Association Malaysia (REHDA) and therefore we’re unable to assess the impact,” he told reporters after the company's shareholders meetings here today.
It was reported that effective 1st November 2017, City Hall or Dewan Bandaraya Kuala Lumpur (DBKL) has frozen approval for new applications to build shopping centres, offices, serviced apartments and luxury condominiums in Kuala Lumpur.
Existing applications — including variations made to building plans that have received development orders — must receive planning permission by January 2018.
Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor had reportedly said there is a glut of shopping centres.
"We don’t want a situation where there are empty shopping centres,” the minister said, adding that with so many projects already having been approved, new development orders will only worsen the situation.
“There are many condominiums priced above RM1 million. This needs to be controlled since there is a glut. There is also too much office space already approved. We need a balance. If there is excess space, the owners may not be able to rent it out,” the minister added.
Today, CIMB Investment Bank Bhd, in its notes to investors, said Malaysia's move to freeze approvals for development of shopping complexes, offices, serviced apartments and luxury condominiums priced over RM1 million here, will address the current oversupply situation.
The analyst said: “If the jurisdiction is only Kuala Lumpur, we expect this to mostly impact the high-end property developers, such as Selangor Properties.
"However, we are of the view that this will have minimal impact on our top picks such as LBS Bina and Mah Sing, as most of their products are less than RM600,000 per unit and both have limited exposure in offices and retail space," she said.
"However, if the moratorium is applicable nationwide, developers across the board could be affected. There might be some impact on E&O’s developments in Penang and UEM Sunrise’s projects in Johor.
"If the situation is prolonged, developers might have to revamp their projects or pricing strategy, potentially leading to weaker sales and earnings," the CIMB analyst added.