PETALING JAYA: Analysts believe that the introduction of the Urban Renewal Act (URA) will act as a structural catalyst for the property sector, as it opens up fresh land banking opportunities in prime locations with potential access to attractive financial incentives.
CGS International Research (CGSI Research) in a report said at its core, the URA aims to accelerate the redevelopment, rejuvenation and revitalisation of ageing or abandoned urban properties by addressing one of the key legal hurdles.
“The unanimous (100%) consent required for the sales of strata-titled properties under the Strata Titles Act 1985.
“Specifically, the URA proposes to lower the consent threshold to 80%, allowing the government or developers to initiate redevelopment without obtaining full agreement from all homeowners.
“Subsequently, original residents will be compensated either via a new unit in the redeveloped project or cash proceeds from the sale to the developer.”
CGSI Research said the proposed 80% consent threshold represents a more conservative stance compared to the Housing and Local Government Ministry’s (KPKT) earlier proposals which had suggested tiered thresholds of 80% for buildings under 30 years old, 75% for those over 30 years old, and 51% for abandoned projects.
“In comparison, Singapore enforces a similar 80% threshold for buildings over 10 years old, while Australia requires 75% to 90% for strata buildings, and New Zealand allows redevelopments with 75% consent among existing homeowners.”
In addition, CGSI Research noted that the KPKT has identified 534 potential redevelopment sites across Peninsular Malaysia, including 139 sites in Kuala Lumpur, followed by Perak (85 sites), Selangor (72), Pahang (58), Kedah (55), Negri Sembilan (49), Johor (36), Terengganu (22), Melaka (nine), Penang (five) and Kelantan (four).
“Particularly, the 139 sites in Kuala Lumpur span circa 3,206.5 acres with an estimated gross development value of RM355.3bil, according to the Kuala Lumpur Structure Plan 2040 published in Nov 23.
“This suggests that a robust pipeline of urban redevelopment opportunities could be unlocked upon the URA’s enactment, especially in prime locations with established transport networks such as the Klang Valley.”
CGSI Research believes these areas are well-positioned for transit-orientated developments, which historically command premium pricing and strong sales, evident from successful precedents like Tun Razak Exchange, Pavilion Damansara Heights, and KL Sentral.
“In our view, while the progress towards enacting URA could mark a transformational milestone for Malaysia’s property landscape, the legislative timeline and regulatory execution risks remain key uncertainties in the near term.”
It noted that the URA is gradually gaining traction, with the government preparing for the bill’s second reading in Parliament in coming months, following its first reading on Aug 21, 2025.
“This marks another step in Malaysia’s ongoing effort to accelerate urban redevelopment activities, aimed at improving living standards and stimulating economic activity amid rapid urbanisation.
“According to World Bank data, Malaysia’s urban population has risen sharply from 26.5% of the total population in 1960 to 79.2% in 2024, underscoring the pressing need for more structured urban renewal initiatives.”
