May be timely to waive property taxes for the second half of 2020, says Knight Frank Malaysia

A woman wears a face mask during the Movement Control Order, limiting the activities of people in Malaysia as a preventive measure against the spread of the COVID-19 novel coronavirus, in Kuala Lumpur on March 25, 2020. (Photo by Mohd RASFAN / AFP)

In the latest economic stimulus package announcement by Prime Minister Tan Sri Muhiyiddin Yassin, the government has put together a RM 250 billion package.

In response to the package, Knight Frank Malaysia, managing director, Sarkunan Subramaniam applauds the rakyat-centric package, however, he says it may be timely to waive property taxes such as quit rents and assessment for the second half of 2020.

“Further stamp duty should be reduced and tax reliefs given to landlords who grant rent waivers to their tenants in order to help in the recovery process of businesses and the country’s property market,” said Sarkunan. 

Sarkunan Subramaniam, Managing Director, Knight Frank Malaysia

He further highlighted that there will be lower activity in leasing and investment in commercial office while in the retail segment, rents will be under further pressure.

“As for the residential market, we expect a “wait-and-see” attitude,” he added.

“As both buyers and sellers have become more vigilant amid the outbreak, a wait and see approach is prevalent as people will try to avoid showrooms and sales galleries during this critical period. In light of the current MCO, there are also disruptions to the property transaction process, such as difficulties in conducting property viewings and conducting of title searches etc,” said Sarkunan.

In the indusrial and logistics sector, Knight Frank Malaysia, executive director of capital markets, Allan Sim says geographical diversification strategies will be key, moving past the current state of outbreak.

Allan Sim, Executive Director of Capital Markets, Knight Frank Malaysia

“Manufacturers may also start locating last mile assembly plants in multiple countries / regions in order to mitigate any geographical risks that may disrupt supply chains,” said Allan.

Additionally, Sim believes that the current imposition of the MCO will incentivise many late adopters of e-commerce to try out online shopping as a means to purchase groceries or essential items.

He also added that this will further accelerate the growth of last mile deliveries fulfillment centers and logistics services as a result.

Knight Frank’s executive director of corporate services, Teh Young Khean on the other hand says business sentiment is at its lowest level, with many operations severely impacted by the outbreak.

“In the immediate term preceding the lifting of the current MCO, co-working or flexible space may be less popular as there will be reduced desire for clients to congregate and interact face to face in one location. Revenue derived from memberships fees and events may be affected during this period although e-events will continue to progress,” Teh pointed out.






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