PETALING JAYA: Foreign interest in data centre investments in Malaysia remains strong, which will result in industrial property continuing to be a major investment theme, says RHB Research.
The research house said interest in industrial property would also be driven by the prolonged US-China trade war.
“The performance of the property sector has been rather flat in the first two months of this year, given the market volatility arising from global concerns over US trade policies and the more recent geopolitical tensions in the Middle East.
“However, the fundamental demand for property has not changed significantly, in our view.
“The prolonged US-China trade war should continue to encourage investments into South-East Asia, and DayOne Data Centers Singapore Pte Ltd recently secured RM15bilin new debt funding for its data centre operations in Malaysia. This indicates the industrial segment should continue to drive the growth of the sector,” the research house added.
Headquartered in Singapore, DayOne is a global leader in digital infrastructure, with a growing footprint across tier-one and emerging markets, including Singapore, Johor, Batam in Indonesia, Greater Bangkok, Hong Kong, Tokyo and beyond.
The research house said it also expects the impact of the expanded sales and service tax (SST) to be manageable for the property segment.
“The exemption of the SST for serviced apartments built on commercial titles is a relief for industry players. The government recently clarified that this segment is now exempted from the SST, as long as the units are intended for residential use and fall under the purview of the Housing Development Act.
“In addition, essential construction materials such as cement, aggregate and sand are still subjected to a 0% tax. As such, only part of the construction component will be subject to the 6% tax, and this will only affect the industrial and commercial property segments,” RHB Research added.