Bandar Malaysia has officially been revived following the signing of a framework agreement between Malaysia and China on 26 April 2019, The Star reports.
The agreement was signed between Malaysia’s Economic Affairs Minister Datuk Seri Azmin Ali and China Railway Group Ltd president Zhang Zongyan, on behalf of project developer IWH-CREC. The signing was witnessed by Malaysia’s Prime Minister Tun Dr Mahathir Mohamad and Chinese Premier Li Keqiang.
The 196-hectare integrated property development project, previously owned by the controversial 1Malaysia Development Bhd, was initially terminated following the change of Federal Government in May 2018.
Its revival is seen to be positive for the local construction industry, according to a report by Hong Leong Investment Bank Research.
The research house anticipates the project to generate a gross development value (GDV) of RM140 billion.
“Assuming 50 per cent of this comprises construction cost, this would present RM70 billion worth of potential job flows,” it said. “Moreover, the emphasis of local content in the construction process would further stimulate local construction activities.”
CIMB Research sees an upside, albeit a limited one. “While the return of Bandar Malaysia is a positive surprise in terms of potentially catalysing new construction works and as the number of affordable housing units in the project is doubled from 5,000 to 10,000, potential beneficiaries are likely limited to smaller/medium-sized building contractors for which tenders could be competitive,” it said in its report.
“New construction works in Bandar Malaysia will also benefit building material players over the longer run,” it added.
However, AmInvestment Bank Research is of the opinion that this project’s revival may not be good news for the property sector, which is currently facing an oversupply situation, The Sun Daily reports.
It noted that the development will only “add more floor space to the already oversupplied residential, commercial, office and retail segments in the Klang Valley”.
Nonetheless, it concedes that the integrated development may stimulate new demand and attract major international financial institutions and multinational corporations to have their regional headquarters there. — Construction+ Online