4Ps (People): Most important property investment reason

I was sharing the 4Ps for Property Investment in Datum Galleria yesterday and the first P is People. It is beyond just population growth though. As long as the city receives a lot of travellers, that’s people too. Imagine a city which is growing and is visited by ever more people year after year. What will happen to the demand for property? Yes, RISING. That city is of course our Kuala Lumpur. I have moved here for the last 5.5 years and I have asked myself this question a few times, “Would I have been more successful if I have moved earlier?” The opportunities are definitely more diverse even if I like Penang because its growing steadily instead of at a fast pace like KL.

In an article in NST, the latest MasterCard’s 2018 Global Destination Cities Index, our Kuala Lumpur is still ranked 7th. By the way, it’s 7th in the WHOLE WORLD. This is our 3rd year at the same spot. In 2017, we welcomed 12.58 million international travellers and most probably this will increase by another 7.1 percent in 2018. That means we should have 13.46 million international visitors in 2018. Foreign leisure and business travellers spent an average of 5.5 nights and spent US$124 (RM514) in the city for 2017. In a sign that we remain ‘affordable,’ total visitor spending wise, KL is ranked only 13th. The top 3 countries where the visitors come from include China (comprising 16.8 per cent of foreign travellers), Thailand (11.8 per cent) and Indonesia (10.3 per cent). (IF only we have HSR, this may change?)  Please do take a look at the top 10 list as below:

Global top 10 destination cities

Rank City 2017 arrivals 2018 growth forecast

1). Bangkok – 20.05 million 9.6%

2). London – 19.83 million 3.0%

3). Paris – 17.44 million 2.9%

4). Dubai – 15.79 million 5.5%

5). Singapore – 13.91 million 4.0%

6). New York – 13.13 million 4.1%

7). Kuala Lumpur – 12.58 million 7.5%

8). Tokyo – 11.93 million 1.6%

9). Istanbul – 10.70 million 19.7%

10). Seoul – 9.54 million 6.1%

NST article for reference here. 

There’s no doubt that the demand for accommodation (property) will increase because every month Kuala Lumpur hosts over 1.1 million international visitors. Assuming they are all sharing rooms, this is still 550,000 rooms needed per month. As long as we continue to be attractive to foreign students who come here for UK / Australia / US degrees via twinning or fully completed here, the numbers will continue to rise. Yes, I know the foreign students do not fly to and fro every month but their parents would definitely be visiting them too. Medical tourism is another attraction. Malaysia earned RM1.3 BILLION in 2017 for medical tourism. Let’s not forget the increase in demand from business travellers too. ASIAN cities already occupy half of the top 10 list. Frankly, it will soon be majority. Happy understanding the potential.

written on 6th Oct 2018

Next suggested article: Slightly up, recovery in property market Malaysia?

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