Change in ‘appetite for alternative’ investments

KUALA LUMPUR: The risk appetite for alternative investments is expected to improve over the next two to three years, due to the need to cultivate resilience in their real estate portfolios amidst the nation’s post-pandemic recovery.

This was the conclusion drawn by Knight Frank Malaysia’s Commercial Real Estate Investment Sentiment Survey, and which added that investors have shown interest in serviced residences, hotels, co-working/flexible offices, senior living and retirement homes and data centres.

They also expanded their areas of interest outside the Klang Valley, to include Sabah, Johor and Penang among the popular destinations for alternative investments, Knight Frank said in a statement yesterday.

The survey also showed that 76% of respondents expect the industrial and logistics sub-sectors to enjoy capital value appreciations in 2022, with 57% anticipating the same for the healthcare sub-sector.

In terms of performance, 68% of respondents expect yields to increase in the logistics sub-sector, with anticipated higher yields for healthcare and industrial sub-sectors.

“Predictably, these opinions are comparable on increase in rents, with rents of logistics properties and in the industrial sub-sector expected to go up, in line with growing demand for space,” it noted.

However, the property consultancy firm also foresees a reduction in occupied office space due to ongoing pressure on occupancy rates and rents, as supply continues to outpace demand.

Knight Frank executive director of Research and Consultancy Amy Wong said respondents are confident that the logistics and industrial sub-sectors will be the quickest to recover within the next 12 months, along with the healthcare sub-sector.

“The traditional sub-sectors of hotel/leisure, office and retail are seen by respondents as a long-term play,” she said. — Bernama

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