Commercial Property Investment in MalaysiaJune 26, 2020
Property investment is a big business in Malaysia. The general consensus is that investing in properties will yield lucrative returns in the long term. This statement applies especially well in terms of commercial properties. Commercial properties tend to yield better returns compared to residential properties.
Property developers in Malaysia have supplied the market with a variety of commercial real estate listings ranging from shop units to office lots. Here are some of the things that you should know about commercial property investment in Malaysia.
In the most simplified terms, the property type is determined by the title that it holds. In this case, a commercial title means that the property is to be purposed for conducting business or other related activities. There are also exceptions where properties will have a mixed title. The title is important as it also contains restrictions and responsibilities that owners and tenants need to adhere.
There are plenty of things for you to consider when purchasing a commercial property. The first thing that you should know is that commercial real estate listings usually have financing margins of up to 80%. Compared to residential properties that have margins of up to 90%, you will be required to fork out a larger amount for the down payment.
Taxes, utilities and fees are also higher compared to residential properties. Utilities such as electricity and gas have significantly higher rates. Even internet and telecommunications charges are also higher for commercial properties. These are all things to consider if you plan on investing in commercial real estate.
Well, it sounds like commercial properties are just much more expensive. Technically, you are paying more on initial investments to get better returns in the long term. This is because commercial properties usually yield more returns in monthly rentals compared to its overall valuation. For example, a RM2mil office space is more likely to get better rental rates compared to a RM2mil luxury condominium.
Other than having better rental yields, commercial spaces also tend to have better appreciation rates. Especially in big cities like Penang, Kuala Lumpur and Johor Bahru, commercial real estate usually has high price appreciations. However, this comes with a caveat. Appreciation rates are usually much better for those that are situated in places with high population catchment. Retail outlets and service shops require high traffic to sustain their businesses.
Being one of the top property developer companies in Malaysia, UDA Property has played an important role in the commercial real estate industry. UDA has developed many successful commercial centers and shopping malls throughout the country.
Click here to check out our latest commercial real estate listings in Malaysia.