The enduring legacy of 2011 will be one of uncertainty in the Middle Eastern investment community, as the effects of the Arab Spring on a regional level, and both the Eurozone crisis and downgrading of Americaʼs economy make themselves felt in markets around the world.
As a result, IP Global notes that Middle East investors have reacted by turning their sights toward the more stable investment markets, such as those of Malaysian real estate.
The release of figures to highlight such a trend was made at Cityscape Global 2011, now in its tenth successful year. According to internal research, IP Global has seen a marked rise of UAE investors into Malaysia of 11.4% Q3 2010 - Q3 2011, underlining its perception as "safe haven" market. This trend is most evident at IP Globalʼs latest real estate project, ʻThe Richmondʼ in Kuala Lumpur, where Middle Eastern investment has risen 14% over the past 12 month period.
According to Tim Murphy, IP Global's Founder and Managing Director, "Malaysia is a sensible market and tends to perform more steadily than the rest of Asia. The property market is well regulated, such that speculators cannot buy and sell quickly, so it doesn't tend to create a boom and bust scenario. That is why we have seen 5.3% growth in the past 19 years."Kuala Lumpur, the Malaysian capital is leading the way as a ʻproperty hotspotʼ within the region; experiencing a greater growth rate than the national average over the past four quarters. In addition, the house price index has increased by 11.4% year-on-year, as reported in Q1 2011.
With over 25 years experience providing Shariah financial services, Malaysia has quickly become the centre for Islamic Finance in Asia. Coupled with diversifying into non US dollar asset markets, Middle East investors are benefiting from their familiarity with the principles of Islamic Finance, that have proven to provide more security than conventional finance methods. Kuala Lumpur in particular is already seeing strong links being forged between Saudi Arabian, U.A.E. and Kuwaiti banks.
A positive Malaysian economic outlook, with the Malaysian Ringgit (formerly Malaysian Dollar) growing in strength against the US Dollar, the country is providing its investors with huge potential. Malaysiaʼs transport links and infrastructure is rapidly gaining pace across many of its cities, and with tourism continuing to rise, real estate investment is predicted to yield great returns for the astute property investor.
Tim Murphy is the founder and CEO of IP Global, a property investment company which specialises in emerging and recovering markets.
