KUALA LUMPUR: The Klang Valley property retail market will face further dilution with the scheduled completion of 13 new shopping malls by the second half 2015 and early 2016.Property consultancy, Knight Frank Malaysia, in its Malaysia Real Estate Highlights for 1H2015 report, said in the short to medium term, Kuala Lumpur City high-end condominium market outlook would be one of caution with lower sales volume and modest/limited price growth anticipated.
"The office market outlook is cautious with lower net absorption as plans for expansion and relocation are put on hold," it said.
It said the local retail industry was expected to grow at a slower pace amid dampened consumer sentiment due to rising cost of living and a slowing economy.
"The sector, despite the subdued market, continues to witness the entry of new internatinal brands as well as expansion of existing brands and outlets, especially at prime shopping centres in Klang Valley," it said.
Knight Frank Managing Director, Sarkunan Subramaniam, said the real estate investment market was subdued due to the current economic uncertainties with the ringgit at a 16-year low, China's stock market downturn, Greek crisis, rising costs of living and Malaysian political debacle.
"All these have had a collective contagion effect on sentiments and people are cautious," he said in a statement.
On the residential segment, Sarkunan said, effective demand was squeezed by the lack of bank financing while commercial investment was diluted by impending supply.
"However, the fundamentals are solid where demand for good quality residences for owner occupation and investment is strong, provided the pricing is seen to be discounted to previous highs and the developer has a good reputation," he said.