Published September 3, 2008

RM4b FDI for Malaysia seen over next 6 months

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(KUALA LUMPUR) Up to RM4 billion (S$1.67 billion) of foreign direct investment (FDI) is expected to flow into the country over the next six months as more investors see Malaysia as a good investment destination amid concerns over a global economic slowdown, according to a report in Malaysia's Business Times.

The fall guy: Australia's Gary Cunningham leaps from KL Tower during an event in conjunction with Malaysia's Independence Day. More investors see the country as a good investment target amid a global economic slowdown

Its transparent laws on land matters, wide use of the English language and value-for-money destination make the country attractive, an industry observer said.

Business Times understands that the FDI will come from the Middle East, South Korea, Hong Kong, China and Taiwan, and is for land acquisitions in the growth corridors, including the Klang Valley.

The deals are believed to be brokered by a local property firm with international interests. 'These new foreign investments could translate into a gross development value exceeding RM15 billion,' a source close to the deals told Business Times.

It is learnt that a Korean developer had acquired 0.4 hectares in Jalan Kia Peng, Kuala Lumpur, for RM2,500 per square foot to build a luxury one-block residence for around RM1 billion.

'The land was acquired at a record price. The residence will be a stunning landmark within the Kuala Lumpur City Centre enclave and may break the record for prices of high-end products. The developer aims to sell the units to Koreans and locals,' the source said.

The Iskandar Malaysia growth corridor in Johor, which has attracted RM33 billion in investments, or 70 per cent of the Johor state government's target of RM47 billion to date, is also experiencing a new wave of investments.

The source said that more investments were expected to come from the United Arab Emirates, Qatar and Bahrain.

Companies from the Middle East - such as Kuwait Finance House, Aldar Properties, Mubadala Development Co, Millennium Development Co, Damac Properties and Limitless Dubai - are already investing in Iskandar Malaysia.

Sabah, which is experiencing a mini-boom after the launch of the Sabah Development Corridor earlier this year, is attracting investors from South Korea, Hong Kong and Taiwan.

Some RM500 million worth of investments are expected to be made by the first quarter of next year for resort and the broader property development, the source added.