After benefitting from a RM 1.35 billion ($320 million) capital injection by the Malaysian Investment Development Authority (MIDA) three years ago, Melaka attracted over 17 million visitors last year, moving the city on the southwestern coast of the Malay peninsula into the ranks of the world’s top travel destinations. The British Post ranked Melaka fifth in its list of the world’s trendiest holiday destination.
Located just over 240 kilometres up the coast from Singapore, Melaka, which is the capital of the state which bears the same name, is a UNESCO World Heritage Site, drawing tourists to its colonial architecture and coastal location, as well as attracting developers and investors to the opportunities presented as the world rediscovers the historic trading hub.
The 600-year-old city is renowned not just for its unique blend of history and culture among the local Malays, Chinese, Dutch and Portuguese, but also widely popular for its tasty local Peranakan cuisine and street food.
Located six kilometres from the capital next to the existing Impression City project, which includes a Sheraton hotel slated for completion in Q2 2022, a parcel of prime land in the Melaka tourism and business city development of Cheng Ho City is being made available to investors ready to take advantage of the area’s potential as a hub for visitors.
Taking up 69.24 acres (280,204 square metres) of the manmade Zheng Island, the L-shaped piece of land has been zoned for commercial development with a plot ratio of 1:6.
With an asking price of RM 40 (just under US$10) per square foot, the site occupies a stretch of the Straits of Melaka that is being developed to cater to the Malaysian state’s growing influx of overseas tourists, helping to drive visitor flow to an expected 20 million or more annually by 2020.
The plot is currently being sold via a private treaty, with JLL Malaysia acting as the exclusive marketing agent for the vendor. For more information, interested parties may contact firstname.lastname@example.org or [email protected] or visit theinvestor.jll.
12 Large-scale Land Transactions in 5 Years
As Malaysia’s second-most visited destination after Kuala Lumpur, and having been rated among Lonely Planet’s Top 10 must-visit destinations in the world, Melaka state has seen 12 large-scale land transactions over the last five years, totalling 340 acres, according to the Valuation & Property Services Department of Malaysia.
“The development site represents a huge opportunity for capital appreciation with direct access facing the Straits of Melaka,” a JLL Malaysia spokesperson said, adding that the site serves a variety of potential waterfront development strategies including luxury boutique hotels, high-end waterfront villas, or mid- to high-end shopping malls.
Consisting of six individual parcels ranging from 8.80 acres to 16.83 acres, each plot comes with a 99-year leasehold due to expire in 2112, with each plot available for purchase individually or collectively.
JLL Malaysia has specified that land titles have been issued for each parcel and the properties are ready for transfer without requiring state consent for the first transfer.
While Melaka City is just six kilometres away Zheng Island site is surrounded by proposed residential and commercial developments, including high-end apartment complexes, retail centres and hotels.
Just three kilometres up the coast, a subsidiary of China’s Xinyuan Real Estate is said to be developing a luxury waterfront resort in the coastal town of Klebang, having announced four years ago its intention to invest $1 billion in the project.
Two kilometres away is the RM 190 million upscale Marina Point apartment project, which are being developed by Sanichi Technology Bhd (STB) and are due for completion this year, while a submarine museum and marine theme park are located within walking distance of the subject site.
These new development projects are being built to serve a growing visitor flow to a city and state blessed with historical sites and a tropical coastline.
Tourist arrivals in Melaka have increased consistently over the past few years, rising from 16.79 million visitors annually in 2017 to 17.02 million in 2018, with an 18 percent jump to 20 million expected by year 2020.
A new port that has been approved by the government, once completed, is expected to increase tourist numbers further, with the new facility expected to attract cruise lines to the 600-year-old city with the likes of Royal Caribbean International (RCL), RCL Voyager of the Seas and Star Clippers just to name a few.
The future establishment of the Kuala Lumpur-Singapore High Speed Rail, which passes through Melaka, is expected to spur further economic growth and attract still more tourists from Singapore and neighbouring states within the Peninsula.
A current major attraction nearby is the RM 300 million ($72 million Encore Melaka, Malaysia’s first indoor theatre located within Impression City.
The 2,000 seat auditorium regularly hosts live performances on its 360-degree rotating stage, including being the only venue outside of China to enjoy live productions of Chinese director Zhang Yimou’s Impression and Encore series.
It is also worth noting that average prices for a 3-star and above hotels in Melaka range from just US$60 to US$100 per night, making the city still more attractive to visitors.
According to Chief Minister of Melaka, Adly Zahari, the city achieved its target of attracting 17 million tourist arrivals last year with 43 percent of visitors to Melaka state coming from China. That Chinese tourist traffic is supported by 21 direct flights operated by China Southern Airlines to Melaka International Airport, which is a 25-minute ride by car from the development site.
Another 27 percent of last year’s flock of tourists came from Singapore and 21 percent from Indonesia, while tourists from Taiwan and Japan also contributed to the total.
The state’s population is also forecast to increase to one million by 2020, up from 924,000 two years ago.
Melaka’s Economic Performance
According to the Department of Statistics Malaysia, the Melaka’s overall economy has seen a median growth rate of 3.9 percent from 2017 – 2018. One of the major contributors to this growth rate is the service sector which expanded by 6.2 percent last year.
Total imports and exports in 2018 increased by 32 percent compared to the previous year, growing from RM 18.3 billion to RM 24.1 billion, whereas the total approved investment projects in Melaka in 2018 amounted to RM 3.3 billion last year, including domestic investments of RM 2.5 billion and RM 0.8 billion in foreign investment.
It is notable that prices for goods and properties in Melaka are significantly lower than other major cities in Malaysia such as Kuala Lumpur, Penang and Johor which provides room for further capital appreciation.
Developers Recognise Melaka’s Potential
Against this backdrop of a booming tourist industry and a growing population, real estate developers have acquired 340 acres of land in large-scale acquisitions over the last five years.
Just last year, a 43-acre plot of land located within the subject site’s vicinity, was purchased by a local developer at RM 43 per square foot. That acquisition followed soon after reports that a local developer had purchased 50 acres of land within the surrounding area, with the intention of developing a world class theme park carrying an international brand name.
Meanwhile, Singapore-listed Hatten Land announced that it had acquired 12.8 acres of land nearby to the development site for RM 195 per square foot.
In 2016, a 10.73-acre plot on Jalan Klebang was also acquired by a local developer for RM 61 per square foot, while a Melaka-based developer purchased a 4.93-acre Jalan Klebang plot for RM 50 per square foot during the same year.