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Malaysia: A booming market for real estate development

Interview - December 9, 2014

As the West has fewer opportunities for real estate development, some developers are looking to countries such as Malaysia for launching new projects. PM Communications sat down with the director of one such company, Mr. Martin R Haeger, to discuss the reason for Malaysia’s real estate boom. 


Malaysia is a booming market in terms of private and commercial real estate development. What do you think are the main driving factors behind this trend?

Historically Malaysia has fallen behind South East Asia's real estate market. Over the last five years there has been dramatic growth in terms of sales price in commercial real estate. The Government is making specific efforts to attract foreign investors into the market. For example, The Tun Razak exchange project or Iskandar in Johor are two key drivers of the international investment in real estate. Iskandar has been successful in bringing Middle Eastern and Chinese investors. Malaysia is still very competitive per square foot when compared to London or Singapore. For long term investors this is the right market.

Our company has been involved 95% in private sector investment. We are specialised in the retail commercial sector. For the past 20 years we have been developing commercial real estate. Developers push for larger formats in terms of scale. I believe that there is more confidence in the market because of the government’s initiative to push for tax reduction and promote bank loans for real estate.

The ETP programme has identified Greater Kuala Lumpur/ Klang Valley as a National Key Economic Area (NKEA). For instance the EPP 1.0 has the objective of attracting 100 MNCs here in KL. What are the main opportunities you see emerging from this government programme?

This programme is very good for the country. I believe that Malaysia has been very protective for the past 20 years. This policy will unlock the next wave of value in real estate. KL will become a real centre for multinational investment. Malaysia is at the forefront of those developing nations that have embraced education as an engine for growth. I believe that the country needs to further develop the ETP programme. There are very good international education institutions in Malaysia that can provide the right skills for the global job market.

What makes Malaysia a hub for MNCs?

Malaysia’s political and economic stability is key. In addition, there isn’t a language barrier in this country. The government has also improved vastly in terms of immigration permits. We have 30 international employees working here and they were able to get their work permits without any problems. Another important factor for international companies looking at establishing in Malaysia is its workforce. Here you can find middle to top management with international exposure easily.

You have an international background as you studied and worked in the UK, US, Singapore, and Malaysia. How would you compare these countries in terms of their application of design and architecture?

They are all very different. In the UK there aren’t many opportunities for new builds. There are a lot of refurbishment projects. In Malaysia, there are tremendous opportunities for new developments. The entire skyline of KL has been built over the past 20 years; it is very new. It has been amazing to be part of the evolution of a new city, not only for the building infrastructure but also for the road, airport and MRT development. The development of the MRT has been visionary.

You have been working in Asia for over 20 years now. How come did you pick Malaysia? What brought you here?

When I was 26 I had a working permit to go to Australia. However, I never made it there. I stopped in Singapore where I met my wife. Meeting her changed the course of my life. I applied for a local company in Singapore, which I worked for four months. When I got married we came to Malaysia. Coming to Malaysia 20 years ago was very unpredictable. Now, the government has put in place policies in order to have transparency and certainty. The fact that the government is attracting foreign companies is really good news for me and an indicator of the country's future capability.

Can you share with us more information regarding HL Architecture, its history and future plans?

I studied in Edinburgh. As soon as I completed my masters in 1989 I decided to head towards Australia. The relationship with MBf holdings came from the time when I was working in Singapore. With my company we developed a shopping centre for them. In 1994 I partnered with a colleague from the UK and opened up our own firm. It was only the two of us, and an apartment. We grew from that to what we are today. We built small retail developments and housing complexes. We now have in consultancy $15 million turnover. For this market that is huge; we are on the top twenty consultancy companies. Our growth strategy is currently from client recommendation. We don’t invest in marketing; we focus on doing a good job for our clients and getting referrals from them for new projects.

Which are the projects that you are most proud of?

I believe that the KLIA2 Gateway is one of the recent projects that I am most proud of. This project will give us a lot of brand recognition. It was very important to get awarded this contract at the same time the airport and the roads were being developed. The success of this retail shops is that people must walk through them in order to go to or from the MRT or the car park.

Another very important project is the APIIT University Campus. APIIT (Asia Pacific Institute of Information Technology) is the strongest local technology school. It has branches in other countries and is now stepping up to a 15,000-student university and we are the architects for the project.

Recently, we have been awarded a very important project. It is six million square meters and USD 1.5 billion. It is a mixed project of shopping centre and housing development. This scale of development is unheard of in the UK now, and that is why being here poses such opportunity.

How interested are you in attracting British talent to come and work for HL Architecture?

We are very interested in attracting British professionals to our company. We have been successful in attracting Spanish and Italian professionals. This maybe because of  economic slow down there, however, we encourage UK Architects to come to Malaysia. The exposure they can get in this market is greater and more diverse than in the UK. We have leading technology here that can help excel their careers and this will pay off in the future. For people trying to do business in Malaysia you must follow some basic rules. They must be prepared to adapt to the local environment and work using their modus operandi. Malaysia is a country of relationships, building them and preserving them. The understanding of the culture is key to succeeding in Malaysia.

If my research is correct, your birthday this week marks around 25 years in Malaysia, What is your vision for your next 25 years?

Having reached a platform of stability in terms of running a very strong structure allows me to take a broader look in terms of what I want to achieve. We have many programmes with local universities to give them scholarships in order to set up a high benchmark in our industry. There are many mediocre people in our industry; we don’t want to have that at HL Architects. There is a wonderful opportunity to develop Malaysia with high design standards.

I am involved not only in my own company but also with MBf Holdings. This gives me the opportunity to be involved in sectors beyond design or architecture. The experience that I have learnt in 20 years as an entrepreneur can be applied in this large group.

We will always have a home in Malaysia.

Thank you for your comments.