The recovery of the country's real estate industry in the second half of this year may be dampened by issues in the construction sector, which is facing raw materials supply pressure.
CBRE Research Asia Pacific (APAC) executive director Ada Choi said the rental market in Malaysia, however, is expected to be flat as the research firm is expecting only a mild decline in rents of less than five per cent for 2021.
"Despite lockdowns similar to some countries in the APAC region, we expect the current wave (of the coronavirus) will be under control relatively quicker.
"I do see there will be improvement but it will probably be first reflected from the demand and recovery in the rental levels.
"Regionally, the economy is expected to rebound despite a delayed recovery in Japan and India," she said in a Maybank Invest ASEAN 2021 virtual session titled "ASEAN Real Estate: Path To Recovery" today.
Choi, who is also head of occupier research and head of data intelligence and management at the research firm, said the rental market in Singapore has already started to stabilise and more investments are coming back to the republic.
Narrowing on the office rentals in the future, Choi said landlords would need to re-think about the user experience as occupiers would no longer be using the space due to rents and locations only, but would also lean more on the attributes of the buildings.
"This includes flexible office options, shared meeting spaces, sustainable or latest technology settings. These will be among the prerequisites for the blue-chip tenants," she said.
She also noted that investments in the real estate sector in the region continue to grow as research has shown that 96 per cent of respondents are going to increase their investment levels mainly in Australia, Hong Kong and Singapore.
This, she said, implies strongly that there is an opportunity in segments such as logistics, value adding or refurbishments in certain segments, namely for cold storages, retail and hotels.
"We expect the new real estate investment volume to increase by 10 per cent this year, which is still a decent amount of growth, although less than the pre-crisis level," she added.
She also said the recovery in occupiers' demand would be more permanent in the second half of 2021, particularly when more people are going back to office and have a better understanding on what hybrid work will look like.
"Overall, markets will still favour the tenants but not for much longer, as many markets will start recovering in the leasing and rental segments.
"Occupiers will have to act before the full recovery of the market and for investment activities which are gaining momentum. It could become more competitive," she added. - Bernama