INTRODUCTION

Positioned for Growth: Navigating Malaysia’s Property Market and Infrastructure Development

The Malaysian property sector is on the cusp of a potential upswing, driven by the 2024 national budget and ongoing and upcoming infrastructure projects. Major projects such as the continued development of the Klang Valley Double Track (KVDT) Phase 2, the East Coast Rail Link (ECRL), Circle Line MRT 3 and Light Rail Transit 3 (LRT 3) are poised to drive new growth opportunities. These infrastructure initiatives are expected to boost demand for residential, commercial, and industrial properties, particularly in key growth corridors across Malaysia.

The broader Malaysian economy demonstrated impressive growth in 2024, expanding by 5.9% in 2Q 2024 (1Q 2024: 4.2%), supported by strong domestic demand, a surge in exports, and increased investment activities. Additional growth drivers included an increase in tourist arrivals and improvements across the manufacturing and services sectors. On a quarter-on-quarter seasonally adjusted basis, the economy grew by 2.9%, outperforming 1Q 2024’s 1.5%.

From the property market front, numerous government measures introduced in Budget 2023 and Budget 2024 have been instrumental in bolstering the market activity:

• Full stamp duty exemption for first-time homebuyers purchasing properties priced up to RM500,000, extended until 31 December 2025.
• Establishment of a high-tech industrial area in Kerian, Northern Perak, aimed at expanding the Electrical and Electronics (E&E) cluster.
• RM546 million allocated to continue 36 Program Perumahan Rakyat (PPR) projects, including a new project in Kluang, Johor, benefiting 5,100 potential new residents.
• RM358 million earmarked for building 3,500 housing units under the Program Rumah Mesra Rakyat to increase the affordable housing supply.
• RM10 billion in guarantees under the Skim Jaminan Kredit Perumahan (SJKP), benefiting 40,000 borrowers.
• A 4% flat stamp duty imposed on land transfers by non-citizens and foreign-owned companies, with exemptions for permanent residents.
• Eased requirements for the Malaysia My Second Home (MM2H) program to attract more tourists and foreign investors.

 

These initiatives have significantly contributed to the overall positive market sentiment. As a result, the property market has experienced steady improvement, and Titijaya is well-positioned to benefit from these measures.

On the Monetary Policy and Financing Landscape front, the Overnight Policy Rate (“OPR”) has remained stable at 3.0%, unchanged since May 2023 This supportive monetary policy stance aligns with the government’s inflation control measures while ensuring conducive borrowing conditions.

The property market continued its upward trajectory in 1H 2024, with 198,906 transactions worth RM105.65 billion recorded, reflecting an 8.0% rise in volume and a 23.8% rise in value compared to the same period in 2023. Notably, 63.9% of these transactions were completed in 2024, demonstrating sustained market activity and growth. The residential sector saw a 6.1% year-on-year growth, driven by declining unsold units and a gradual improvement in new housing supply.

The primary property market performance in 1H 2024 showed a decline, with only 22,827 units launched compared to 34,697 units in 1H 2023, reflecting a downturn across most states except WP Kuala Lumpur, Kedah, and Terengganu. Despite the reduced launches, sales performance improved slightly to 26.2%, up from 23.4% in 1H 2023, on the back of the government incentives in Budget 2024 aimed at promoting homeownership, particularly for first-time buyers.

The secondary market (resales of existing homes) remains the dominant force in the residential sector, while the primary market (sales of new homes) is absorbing supply steadily, particularly in the affordable housing segment. The government’s focus on affordable housing, through schemes such as i-MILIKI, aligns with Titijaya’s mission to provide accessible homeownership opportunities for first-time buyers.

The outlook for the Malaysian property market in 2024 remains promising, supported by government initiatives, steady economic growth, and key infrastructure developments. As we move forward, Titijaya is committed to leveraging these opportunities and ensuring sustainable growth, contributing to Malaysia’s broader economic goals. With a focus on innovation, sustainability, and accessibility, we are confident that we will continue to deliver value to our stakeholders while positioning ourselves as a leader in the Malaysian property market.

 

PROSPECTS

As the Group continues to grow, our focus remains steadfast on adopting a diversified and resilient growth strategy, adopting a comprehensive approach to launch a variety of developments catering to the evolving demands of the market, spanning both residential and commercial segments, from affordable to high-end, ensuring a broad spectrum of customer needs are met.

In FYE2024, we remain focused on clearing our inventory, with the successful handover of multiple developments reflecting our commitment. Encouraging sales results, driven by active marketing and strategic execution, affirm the Group’s adaptability in responding to market dynamics and the decision to prioritise inventory clearance over new launches during the pandemic, positioning us for future growth.

Our approach to project development is both thoughtful and deliberate, with each project designed to offer a unique selling proposition, whether through location, innovative design, or world-class amenities. We engage in extensive market research, working closely with industry experts, potential buyers, and financial partners to ensure our products are well-aligned with current market demands. This allows us to fine-tune our pricing strategies and sales campaigns to better meet customer expectations.

A strong emphasis on marketing remains key to our success. We are leveraging both digital and conventional platforms to engage a wide audience. Our digital strategy includes interactive project websites, social media outreach, and virtual tours, allowing potential buyers to explore our developments in detail. On the ground, physical show units offer an immersive experience, giving buyers a true sense of the value and quality of our offerings.

To further bolster our market position, we are collaborating with local businesses and financial institutions through joint marketing efforts which will also enhance our visibility and broaden our reach. Titijaya has announced two key partnerships with Bank Islam and Maybank to enhance home financing options for buyers. The Memorandum of Understanding (“MOU”) with Bank Islam will provide end-financing solutions, including the Skim Jaminan Kredit Perumahan – MADANI for first-time homebuyers in our Damaisuria township. Additionally, Titijaya has also partnered with Maybank to introduce MyDeco Financing, which offers up to 90% property financing and an extra 30% for home renovations.

From an operational standpoint, the Group is equally committed to expanding its recurring income streams. The hospitality and logistics sectors play a crucial role in this aspect, providing a stable revenue base that balances the cyclical nature of the property market. The successful launch of Citadines Waterfront Kota Kinabalu and the imminent completion of the Bayan Lepas logistics facility underscore our ability to diversify income sources and drive consistent revenue growth.

Sustainability remains a key pillar of our growth strategy. The integration of Environmental, Social, and Governance (ESG) principles into our operations ensures that we are aligned with global sustainability trends and regulatory expectations. This focus on sustainable building practices and energy efficiency not only reduces our carbon footprint but also creates long-term value for shareholders through cost savings and enhanced brand reputation.

In summary, the Group’s strategic diversification, focus on recurrent income, and commitment to sustainability position us well to navigate the evolving property landscape. With a robust development portfolio and a strong operational framework, the Group is confident in delivering long-term growth and value to all stakeholders.

 

Gearing Up for Growth with Strategic Klang Valley Projects

Looking ahead to Financial Year Ending 30 June 2025 (“FYE2025”) and beyond, Titijaya will maintain its strategic focus on the Klang Valley, with several key launches planned. These include Phase 2 of the residential development at Newton @ Jalan Ampang, building on the success of Neu Suites (Phase 1), as well as the Seri Residency landed residential project and Zone Innovation Park 3—a unique landed commercial development in Bukit Raja, Klang. These projects will solidify our presence in high-growth areas and are designed to meet the increasing demand for both residential and hybrid commercial-industrial spaces.

Titijaya is poised to launch future projects where it will primarily be residential-focused, with significant launches like the 3rdNvenue Phase 2 serviced apartments in FYE2025, the Damaisuria Seiring Residensi Phase 2 serviced apartments in FYE2026, and Laman Idaman 2-storey terrace houses in FYE2027. The 3rdNvenue Phase 1 office building has been well-received, achieving an impressive 96.2% take-up rate, which is expected to create continued momentum for Phase 2.

The ongoing projects currently have a combined GDV of RM916.8 million, largely driven by Riveria City Phase 2 serviced apartments, launched in FYE2024, and Damaisuria Seiring Residensi Phase 1A serviced apartments. Excluding recent FYE2024 launches, the average take-up rate for ongoing projects stands at 78.0%, with the residential segment comprising 88.1% of total GDV.

In the non-residential sector, Zone Innovation Park 2, introduced in 2Q FYE2024, features hybrid shoplots combining office, retail, and warehouse spaces. While the current take-up rate remains modest at 31.9%, the project has garnered increased interest due to its multifunctional design tailored to various business needs.

With an ongoing GDV of approximately RM900 million and a strategic landbank of 109 acres across major Klang Valley cities, Titijaya is well-positioned to continue driving growth and delivering value through its diverse and high-potential projects.

 

APPRECIATION

As we embark on the next chapter of our journey, I am filled with gratitude and optimism for the path that lies ahead. The Group’s accomplishments over the past year are a reflection of the shared vision, dedication, and collaborative spirit that defines Titijaya. I extend my sincere thanks to the Board of Directors for their strategic insight, as well as to our management team and dedicated employees for their tireless work. Together, we have surpassed key financial milestones and adapted to challenges with resilience and agility.

I would also like to convey our heartfelt appreciation to Dato’ Sri Tengku Uzir Bin Tengku Dato’ Ubaidillah, our outgoing Independent Non-Executive Chairman, for his outstanding leadership and dedicated service during his tenure. His invaluable guidance and unwavering commitment have been crucial in steering Titijaya through pivotal moments, and his contributions have left a lasting impact on the Group’s success.

As we bid farewell to Dato’ Sri Tengku Uzir, we are pleased to welcome Datuk Seri Haji Mahadi Bin C. Ngah as our new Independent Non-Executive Chairman. Datuk Seri Haji Mahadi brings with him vast expertise in urban and rural planning, accumulated over decades of public service. Most notably, he served as the 13th Mayor of Kuala Lumpur, where he demonstrated strong leadership in managing urban development and governance.

Looking ahead, we are acutely aware of the dynamic landscape that lies before us. With fresh perspectives from our new Board members and a strengthened commitment from all levels of the Group, Titijaya is well-equipped to thrive in this evolving environment. As we build on the progress we’ve made, we are confident in our ability to seize new opportunities, driven by the expertise of our team and the trust of our stakeholders.

In 2024 and beyond, we aim to not only sustain our growth but to elevate it to new heights, leveraging our collective strengths and embracing the challenges ahead with determination and vision. Together, we will continue to forge a path of success, underpinned by a relentless pursuit of excellence.