It’s not all doom and gloom
A different perspective needs to be taken to turn the negatives into positives
By Joseph Wong firstname.lastname@example.org
The Malaysian property industry has, of late, been smacked left, right and centre. Already in the slowdown cycle, it has taken a fresh beating from the current Covid-19 outbreak as well as the sudden change in government. Not to mention the US-China Trade war since 2019 was already a dampener to the global trade economy, which also affected many aspects of the property sector.
Perhaps one of the hardest-hit property sub-sector was the hotel industry as it is very tourist-based and with the country having shut down its international flights, that has a huge impact on the hotels. “Many countries who derived income from tourism sector mainly by the Chinese tourists’ footfall, were directly hampered,” said Alan Poon, an award-winning property speaker and the Malaysia Book of Records holder for simultaneously launching three tenancy books on real estate in Malaysia.
Although Malaysia is doing well in terms of containing the epidemic, we are not spared from the effects, especially the badly hit aviation, hospitality and retail industries. “Coupled with the sudden political crisis and change of government which had clouded many businesses activities and investors’ confidence, during the week-long political impasse, things were pretty gloomy on the local front too,” he said.
And when people thought it could not get more worst, oil prices suddenly experienced their biggest plunge since the 1991 Gulf War (under USD30 per barrel). “All this and more indeed had dashed the hopes of a route to full economic recovery,” he said. Despite all the challenges, there are many opportunities for the property industry as well as those related to it.
Look on the bright side
The movement control order (MCO) issued by the government has shown that Malaysians can work from home. If this proves to be advantageous, this shift could possibly be the next norm. As such will open the demand for home offices or see new property development incorporating an office into their home layouts.
At the same time, home furnishings catering to this will see a demand. One thing is certain: Once the working population has experienced the benefits of working from home, it will be difficult to revert back to the old work practices. As homeowners have to comply with the MCO, they will also see what needs to be improved in their home, especially if remote working becomes mainstream.
One designer predicts that there will be more opportunities for home improvement related businesses. One sure lesson learnt from the Covid-19 outbreak is the lack of health and medical facilities. It is no wonder that property developers with health and wellness or medical components as part of their portfolio are expected to perform better than the rest. The question is how fast other stakeholders can enter the playing field.
Some sub-sectors will shine
Poon believed that the wellness real estate, a newly coined phrase, will be the next property star. “This term may be still new or alien to many in the property investors but definitely not the stakeholders who use the space all along.
Do not confuse wellness real estate with hotel business, providing just the conventional spa or massage centres. “Neither is it medical tourism where foreigners visit Malaysia seeking medical therapies at hospitals which we are most known for in the Asean region,” he said.
As a matter of fact, wellness focuses more on preventive healthcare whereas medical treatments are sought to cure certain illness or diseases, he said, pointing out the adage: “Prevention is always better than cure.”
According to the Global Wellness Institute (GWI), a recognised non-profit organisation and the leading source for authoritative wellness industry research, wellness real estate is defined as the construction of residential and commercial or institutional properties that incorporate intentional wellness elements in their design, materials, and buildings as well as their amenities and services.
This sub-sector of real estate was already making headwinds as the hottest topic recently in GWI Summit. In spite of this, this new venue is still vaguely understood by many in the real estate fraternity in Malaysia whether they are developers or investment company, said Poon.
However, Malaysia could capitalise on the existing overhang supply and unlock the potential of these assets into a need-based proposition which does not depend largely on tourism in good or bad times, he said. The fact is that the Covid-19 breakout, coupled with all the other factors, has put the real estate industry into a corner. The question is whether stakeholders can find a niche and leverage on it rather than giving in to the doom and gloom.