Savills Malaysia: Hospitality Sector to be Worst Hit by Pandemic

0 10

Malaysia’s hospitality sector is expected to be the worst hit among all property sectors, by the Covid-19 pandemic, said Savills Malaysia, in its Asia Pacific Investment Quarterly 1Q 2020 report.

It noted that the Malaysian Association of Hotels had projected revenue loss at about RM560mil just for the four-week Movement Control Order (MCO) period, on top of a RM75mil revenue loss in the weeks leading up to the MCO.

The retail sector, it said, had not been spared either, although some mall landlords have granted one to three months of rental rebate in view of the MCO period.

“While there is no visibility of impact towards occupancy and rents at this juncture, the market expects the SMEs to face survival challenges in the next few months, ” it said in the report issued on Monday.

Investment activity declined 40% quarter-on-quarter (q-o-q), largely attributed to the seasonal sluggishness due to holiday seasons in the first quarter, and the inability to finalise transactions during the MCO period.

Notably, it said, the transactions were mostly by manufacturers for industrial land.

“As Malaysians find a way to work remotely (supported by RM600mil of free internet data usage to mobile users during the MCO), this will change demand for physical real estate and the way it is used.

“The surge in demand for online purchase of goods (groceries and food) during the MCO has

highlighted a gap in urban logistics and retail distribution hubs which can be addressed once demand has stabilised to normal levels, ” it said.

Savills Malaysia added that investment activity is expected to remain slow, coupled with political uncertainty – following the recent changes in Malaysia’s political scene.

“The political uncertainty, added to the pandemic and economic crises, is expected to make up much of the tone for the rest of the next quarter, with the full effect from recent events and challenges for real estate expected to emerge over the rest of 2020, ” it said.

Source TheStar

Leave A Reply

Your email address will not be published.