City & Country: Booming sector

November 18, 2014 8:00 PM SGT
SABAH, affectionately known as the Land Below the Wind, has seen a spurt of economic growth in the past few years. It is blessed with natural resources such as oil and gas, and fertile agricultural land. The state has the third largest population in Malaysia, with 32 ethnic groups. According to the Department of Statistics, Sabah has a population of 3.5 million, with an average annual growth rate of 2.3%.
Kota Kinabalu, once a sleepy town, has been transformed into a thriving hub of activities. According to Alexander Lee, associate director of Laurelcap Sdn Bhd, the capital of Sabah has a historical population growth rate of 2.42%.
“It is estimated that the population of KK alone will reach nearly one million by 2020. The city has experienced rapid growth and properties are mushrooming everywhere to cater for the high demand and it is one of the fastest growing cities in Malaysia,” says Lee.
Dr Daniele Gambero, CEO of the REI Group of Companies, believes the emergence of KK as a property investment destination is due to the surge in tourist arrivals and the timing.
“Things happened at the right time for KK. The property market needs economic drivers and for the city, tourism is the best possible one. The palm oil, rubber and oil and gas industries also contributed to the economic development of the state. In the last few years, property investment has become a trend in Malaysia, and the state government and property developers have been smart enough to tap into this market.”
He says the idea of “you build it and they will come” does not apply to property development.
“There must be a fundamental growth that will attract businesses and people. Only then will the property market grow. This is precisely what has happened in KK and the property market has been booming since the middle of the past decade and will continue to do so for several more years.”
Ginn Lai, associate director of Knight Frank Sabah, notes that as many of the developed cities in Asia struggle with heated property markets, Sabah is at...