THE property market in Kuala Terengganu expected to continue to be weak for the next nine months.
The sense of buoyancy that once marked the city out, however, has been replaced with a sense of hesitancy. This situation has been induced by everything from price disparity to the weakness of the ringgit. However, on a positive note, the proposed East Coast Rail Link (ECRL) will spur a new wave of development to realise the socio-economic potential for the state.
There will be several major projects completed in the state over the next two years. They include the 632m drawbridge linking Kuala Terengganu City Centre and Batu Rakit, Menara MBKT, Coast Kemaman in Cukai, Movenpick Spa Resort in Cendering, and Pulau Bayas Tax-Free Zone in Tasik Kenyir.
OVERALL MARKET PERFORMANCE
Residential
The residential market was the most active sub-sector in Terengganu. Despite the continuing weak market, prices of residential properties are expected to remain resilient. Demand is still strong, especially in desirable areas such as Kuala Terengganu City Centre, Dungun and Cukai. Prices of double-storey terraced houses in Kuala Ibai have maintained at RM450,000 to RM480,000 per unit. However, prices for strata-titled properties, such as apartments and condominiums, will be facing downwards pressure in coming months.
Office
Transaction of purpose-built offices remains scarce and rental levels generally indicated a stable trend. The vacancy rate as at early this year remained the same as last year with the exception for Menara Permint, when a large tenant — the Inland Revenue Board — vacated the building and moved to PB Square. Upon the completion of the 30-storey Menara MBKT by the end of this year, the existing office stock of 3,660,000 sq ft will increase substantially. Prevailing rentals remained at RM30 to RM50 per sq m.
Retail/Shophouse
The commercial property market in Terengganu has experienced significant price expansion over the past seven years, with increased prices at several districts. However, due to oversupply, prices and rental for traditional shophouses/offices have shown slight downward movement, especially in sub-urban areas. A three-storey shop office at Dataran Austin changed hands recently at RM1.1 million, a drop of 10 to 15 per cent from RM1.2 million to RM1.3 million in 2015. In the city centre, the newly completed projects — Panji Curve and Dataran Alamanda — have recorded a slow take-up rate two years after their launch. The shophouse/office sub-sector is expected to experience even higher vacancy rates this year due to the current economic uncertainties with the ringgit at an 18-year low.
Industrial
The industrial sector remained stable and there were no additional industrial developments in recent years. Prices of industrial sites stabilised at between RM45 and RM50 per sq ft in Gong Badak Industrial Estate. The government’s aim of creating an industrial corridor in the east coast through the improvement of infrastructure within the East Coast Economic Region will definitely benefit the state. The proposed 600km ECRL from Kuala Lumpur to Tumpat in Kelantan will transform the economic and social landscape of the east-coast states, especially Terengganu. The notable new player in the industry sector is the steel mill by Eastern Steel Sdn Bhd in Kerteh, Kemaman. The mill, which is under construction, covers 510ha land undertaken by a China-Malaysia joint venture company.
Story courtesy of Henry Butcher Malaysia