Budget 2024 focus on Perak’s high-tech industrial area will boost sector – Analysts
16 Oct 2023
The announcement of a new high-tech industrial area in Kerian, north of Perak in Budget 2024 is expected to attract developers, and have spillover impacts on the area.
Maybank Investment Bank Bhd said it will continue to favour developers involved in industrial park projects as demand and sale of such properties have gained momentum since April 2022, especially after the reopening of international borders.
“We anticipate this strong sales momentum to continue into 2024, driven by increased investment diversion from China due to the ongoing US-China trade war.
“Elsewhere, our investment thesis for property stocks with exposure to Iskandar Malaysia and Penang island remains, ahead of announcements relating to the Johor-Singapore Special Economic Zone in end-Oct/Nov 2023, and the final alignment of the Penang LRT by early-2024,” the bank said in a note today.
Maybank, however, said there were no other details in the Budget 2024 speech, and it is unclear who will spearhead this development initiative and the specific investments that this new area intends to attract.
The bank maintained its neutral call on the sector.
Separately, RHB expressed the same sentiment on the new project in Kerian, north of Perak, saying that this initiative should encourage the growth of the housing market in the vicinity.
“Eco World Development and Tambun Indah are the developers that have projects in the south of Seberang Perai. Over the next year to two, we expect some developers to explore land banking opportunities in the surrounding areas,” it added.
RHB noted that Budget 2024 incentives have a positive spillover on the property sector, with some new policies and incentives to be introduced to achieve more high-impact investments.
“Property sales in the remainder of 2023 and going into 2024 will be driven by pent-up demand post-pandemic, positive spillover from the increasing demand for industrial properties, and infrastructure developments which include the Rapid Transit System, and potentially Mass Rapid Transit 3 and high-speed rail,” it said.
RHB maintained its overweight call on the sector.
Meanwhile, MIDF has maintained its positive call on the property sector. It expects property demand to continue to recover amid the expectation that the overnight policy rate to remain unchanged for the rest of this year.
“The improving property overhang in Malaysia further bodes well for the sector’s near-term outlook,” MIDF said in a note today.