RHB Investment Bank Bhd (RHB Research) has maintained its OVERWEIGHT call on the real estate sector, with Buy ratings on all nine stocks under its coverage, citing resilient industrial demand and favourable SST clarification as key drivers. Sime Darby Property and Sunway were highlighted as top picks by RHB Research.
Despite headwinds from global tariff uncertainty and geopolitical tension in the Middle East, RHB analysts believe the outlook remains constructive, particularly for industrial properties, supported by sustained foreign interest in data centre investments in Malaysia. The sector is also expected to benefit from a stable interest rate environment, aiding housing demand recovery.
The Government’s decision to exempt serviced apartments built on commercial titles from the Sales and Service Tax (SST), provided they are for residential use under the Housing Development Act, was seen as a relief for developers. Analysts noted that key construction materials such as cement, aggregates and sand remain taxed at 0%, mitigating cost concerns. As a result, only certain components of industrial and commercial projects will bear the 6% SST impact.
In Iskandar Malaysia, sentiment continues to strengthen, with robust take-up rates for new launches and property prices trending higher. According to RHB Research, demand has been particularly strong during weekends, with hotel occupancy remaining high. Retail and rental prices in some commercial clusters are now on par with those in the Klang Valley, signalling heightened investor confidence. The house expected this momentum to be further reinforced by the Johor-Singapore Special Economic Zone and the 2026 completion of the Rapid Transit System (RTS) Link.
While the Johor market appears vibrant, developers are expected to adopt a more cautious approach in other regions. RHB forecasts steady demand for landed residential, industrial and commercial properties, which continue to attract end-users and investors. However, the higher-end high-rise segment may face some resistance, although affordable units are likely to remain resilient.
Despite the sector trading at a 55% discount to its RNAV—compared to a recent peak of 45%, RHB Research said the underlying property demand remains intact, even as broader equity markets may be disrupted by regulatory shifts in the US. The research house reiterated that valuations are now more compelling, offering investors an opportunity to capitalise on potential upside.
