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• priPUBLISHED:  1:25 PM, MARCH 27, 2017

UPDATED:  5:20 AM, MARCH 28, 2017

 

SINGAPORE &mdash China has, in the past two years, overtaken Singapore to become the top foreign investor in the Malaysian real estate market, drawn by large-scale projects such as Iskandar in Johor and Bandar Malaysia in Kuala Lumpur.
 
From 2014 to 2016, Chinese companies, mainly developers, invested an estimated S$2.6 billion in Malaysia, compared to Singapore&rsquo s S$1.6 billion, a report by property consultancy Cushman & Wakefield said on Monday (March 27). At the height of Iskandar&rsquo s development boom in 2013, the Chinese committed about S$2.7 billion, it noted.

Ms Sigrid Zialcita, managing director, Asia Pacific Research at Cushman & Wakefield, said: &ldquo Boosted by the proximity to Singapore, development opportunities in Iskandar have been a favoured destination for Chinese capital in the emerging market space. In the last three years, Chinese investors also accounted for 46 per cent of real estate investments in the country and were involved in some of the largest land transactions in the country.

&ldquo While the variety of options in a globalised real estate market, as well as a desire to diversify, could have shifted Singapore investments, there is no denying that this is similar to what has been seen around the world &mdash Chinese capital is shaking up the marketplace. However, since last year, there has been a notable shift of Chinese investments into economic projects that will deliver longer-term benefits to the Malaysian economy,&rdquo she added.

China Railway, with Johor-based Iskandar Waterfront Holdings, jointly acquired a 60 per cent stake in the Bandar Malaysia project from state-owned 1Malaysia Development Berhad for S$2.3 billion in one of the country&rsquo s largest land transactions. 
Touted to be the world&rsquo s largest underground city, the project includes residential and commercial complexes and will serve as Kuala Lumpur&rsquo s gateway for the high speed rail line to Singapore. 

Besides China Railway, a number of Chinese multinational companies will also base their regional operations in Malaysia. Huawei Technologies late last year opened its regional headquarters in the Malaysian capital while e-commerce giant Alibaba Group has also reportedly planned to set up a regional distribution hub within KLIA Aeropolis as well as a logistics centre in Iskandar.

&ldquo Significant investments from Chinese companies have filled a crucial link in fuelling Malaysia&rsquo s economic vision,&rsquo &rsquo said Ms Zialcita. &lsquo &lsquo The Malaysian government, since 2010, has unveiled several initiatives to propel the country up the income ladder.
&lsquo &lsquo These projects will continue to lend viability to future plans as it develops critical infrastructure and foster commercial activities. We expect real estate values to benefit from the government&rsquo s sustained efforts to raise the level of economic development and income in the country.&rsquo &rsquo

Meanwhile, the number of Chinese nationals moving to Malaysia has been picking up in what the South China Morning Post called the &ldquo third wave&rdquo of Chinese migration to the country. 

The newspaper reported at the weekend that almost 8,000 Chinese nationals emigrated to Malaysia from 2002 to 2016 under the Malaysia My Second Home programme, accounting for about a quarter of almost 32,000 foreigners granted residency under the scheme.