pg. 25 Business Overview Integrated Annual Report 2025 OPERATING ENVIRONMENT RESIDENTIAL In the near term, the residential sector is expected to experience moderate buyer demand, with buyers being more selective in their criteria, including locations offering connectivity, products with optimised layouts suited to evolving home buyers’ needs, and integrated developments with lifestyle appeal. The uptick in residential properties enhances communities, increasing local footfall and providing a consistent customer base and workforce that benefits both tenants and REITs. Klang Valley: Overall residential supply recorded a y-o-y 9M increase of 3.8% in the Klang Valley. While highrise transaction volume decreased by 4.0%, transaction value increased by 4.7%; landed transaction volume and value decreased by 6.7% and 3.1%, respectively. Overall, overhang levels decreased, driven by the highrise segment, which saw improved absorption, while the landed segment saw a 28.2% y-o-y increase in overhang levels for the nine months ending September 2025. Highrise overhang is concentrated in Kuala Lumpur due to land scarcity, while landed overhang is concentrated in Selangor. With an emphasis on housing affordability, mid-range properties under RM500,000 continue to receive steady interest from first-time homebuyers, young families, and urban professionals. Nonetheless, buyers are generally exhibiting a more cautious approach, carefully evaluating their choices in terms of location, convenience, the relevance of space use, lifestyle amenities, and security, among others, when making their purchase. This is expected to continue into 2026, when developers will need to adopt layouts and create community and experiential spaces to meet buyer demand for space use and lifestyle, differentiating themselves from competitors. This is also expected to drive the development of integrated components, such as retail, commercial, and office areas around residential developments. Johor: The Johor residential market recorded a y-o-y increase of 2.9% in total supply for the 9M ending 2025, led by expansion of the high-rise segment of 4.5% and an increase of 2.3% in the landed segment. In the near term, the Johor residential market is expected to be characterised by city-centre demand and demand arising from the RTS corridor, particularly from investor and cross-border commuter interests. With the completion of the RTS, the time taken for the cross-border journey will be reduced to approximately five (5) minutes, redefining cross-border connectivity between Johor Bahru and Singapore. The immediate vicinity surrounding the CIQ complex is already experiencing strong demand, with developers snapping up land for mixed development to capitalise on this infrastructure catalyst. In Iskandar Malaysia, landed residential homes continue to perform well, where transaction values recording y-o-y 9M increases up to 22.0% in the cluster home segment. The residential segment in Johor is expected to sustain its performance. However, investment-led buyers may be wary of oversupply risks and overpricing in fringe areas with less cohesive last-mile connectivity. For more information on the macroeconomic impacts and future outlooks of the REIT’s portfolio segments, please refer to the respective segments in the Segmental Highlights of the Portfolio Capital section of this IAR2025.
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