Business Review Malaysia 1 The Vibes article, dated 2023. 2 New Straits Times article, dated 2023. 3 Bank Negara Malaysia article, dated Q3 2023. 4 Bloomberg article, dated 5 December 2023. 5 MIDF Research article, dated 14 October 2023. OVERVIEW Perennial Holdings’ portfolio in other markets, beyond the core markets of Singapore and China, are in two key growth Southeast Asian markets, comprising an integrated waterfront development in Malaysia, The Light City and a large-scale residential development in Indonesia, The Sanctuary Collection. In 2023, despite the challenging global environment, both Malaysia and Indonesia have shown improving economic growth momentum anchored by resilient domestic demand. MARKET OUTLOOK Penang, also known as the Silicon Valley of the East, is among its top contributors. Outpacing Malaysia’s Gross Domestic Product (“GDP”) growth rate yearly since 2014, Penang contributed 7.4% (RM112.1 billion)1 in 2022 to the national GDP. For the retail segment in Penang, the overall occupancy level on Penang Island was nearly 80%, driven by the performance of select malls. Penang’s Meetings, Incentives, Conventions, and Exhibitions (“MICE”) activities have steadily picked up with stronger tourism Strait of Malacca 马六甲海峡 Penang Bridge 槟城大桥 Penang Second Bridge 槟城第二大桥 Penang Strait 槟城海峡 Tun Dr Lim Chong Eu Expressway 林倉祐大道 Gurney Drive 新关仔角 Jalan Sultan Azlan Shah 苏丹阿兹兰莎路 North-South Expressway Northern Route 南北大道北段 ButterworthKulim Expressway 北海–居林大道 North-South Expressway Northern Route 南北大道北段 Butterworth Outer Ring Road 北海外环公路 Penang Strait 槟城海峡 Penang Island 槟岛 Butterworth 北海 Bukit Mertajam 大山脚 George Town 乔治市 Raja Tun Uda Ferry Terminal 乔治市码头 Penang Sentral 槟城中环广场 Swettenham Pier Cruise Terminal 槟城瑞天咸 邮轮码头 Sungai Nibong Bus Terminal 双溪里蒙 巴士总站 Prai Free Industrial Zone 北赖自由贸易 工业区 Bayan Lepas Free Industrial Zone 峇六拜自由 贸易工业区 Permatang Pauh 峇东埔 Perai 北赖 Batu Maung 峇都茅 Gelugor 牛汝莪 Tanjung Tokong 丹绒道光 Tanjung Bungah 丹绒武雅 Batu Ferringhi 峇都丁宜 The Light City Penang Hill 升旗山 Jerejak Island 木寇山岛 Aman Island 安曼岛 Gedung Island 葛东岛 Penang International Airport 槟城国际机场 Map of The Light City, Penang Perennial Holdings’ Owned Asset 鹏瑞利的自有资产 Expressway 高速公路 Airport 国际机场 Bus Terminal 巴士总站 Transportation Hub 交通枢纽 Cruise Terminal 邮轮码头 Ferry Terminal 渡轮码头 levels, which could be partly attributed to more direct flights to the island. Penang’s office segment also held up well with increasing rents for higher quality buildings and an overall occupancy rate above 80%. Additionally, Penang’s residential property market was the second-best performing market in Southeast Asia with an annual growth of 5.78% as at 1H 20232, after Singapore, with high-rise residential sector registering higher volume and value of transactions. In the same year, the Ministry of Tourism, Arts and Culture (MOTAC) introduced several initiatives aimed at attracting tourists and foreign investors to Malaysia under the country’s visa liberalisation and Malaysia My Second Home (MM2H) programme. Such initiatives are expected to boost tourism and demand for residential projects in Penang, which will, in turn, bode well for the Company’s integrated development. MARKET REVIEW In 2023, the development of Phase One of The Light City achieved substantial progress. The first phase of the integrated waterfront development includes The Waterfront Shoppes retail component, Penang Waterfront Convention Centre, the largest convention centre in Penang, Mezzo, the first residential phase, as well as hotel and office components. As at 31 December 2023, more than 70% of Mezzo has been sold despite price increases during the year. All units are expected to be sold by 2024. During the year, The Light City entered into a hotel management agreement with Minyoun Hospitality, an established hotel operator in Asia, to operate a 4-star and a 5-star hotel to cater to different customer segments. The Light City is also working to secure reputable anchors and mini-anchor tenants for The Waterfront Shoppes as well as esteemed an international convention centre operator to manage the convention centre. STRATEGIC PRIORITIES In 2024, Malaysia’s economic growth is expected to moderate to between 4.0% and 5.0%3, underpinned by continued expansion in domestic demand and improvement in external demand, with tourist arrivals in Malaysia expected to surpass the pre-pandemic level of above 26.1 million foreign visitors4, while private consumption is expected to increase by 5.7%. In addition, the Malaysian Government has unveiled Malaysia’s biggest-ever budget of RM393.8 billion to be spent in 2024 to counter slowing growth from global headwinds that are expected to persist in the new year. The budget includes higher infrastructure spending of RM10 billion5 to expand the light rail transit project in Penang. In tandem with Penang’s continued economic recovery trajectory and growth, The Light City will intensify its leasing momentum for its retail and office components to secure preopening occupancy as well as sales momentum for its residential components. The Light City will also continue to refine its overall retail, business, MICE and hospitality offerings to cater to market demands for a successful launch of the various components. To continue the strong sales momentum from Mezzo, sales for the second residential phase, Lightwater Residences, are expected to be launched in 2024. The Light City is in a strategic position to capitalise on Malaysia’s increasingly affluent population’s demands for a high-quality lifestyle with its integrated development featuring luxury living, waterfront dining and shopping, premier office spaces and upscale hospitality. Amidst easing domestic inflation and a steady growth outlook, Perennial Holdings will continue to seek expansion opportunities to deepen its presence in Malaysia. 74 PERENNIAL HOLDINGS PRIVATE LIMITED
RkJQdWJsaXNoZXIy NTM2MDQ5