KUALA LUMPUR, March 17 (Bernama) -- Top-tier Malaysian property developers are leading Australia’s largest urban renewal projects, while Malaysia is still debating the crucial Urban Renewal Act (URA) amid deteriorating low-cost housing, said Minister of Housing and Local Government, Nga Kor Ming.
Set to be tabled in Parliament in July, the URA has sparked heated debates among property developers and homeowners, with key concerns revolving around the percentage of Bumiputera ownership and the “en bloc” sale of entire strata developments, which has raised fears of potential displacement, particularly among lower-income house owners.
Nga highlighted that Malaysian property developers such as S P Setia Bhd and Gamuda Bhd’s property arm, Gamuda Land, are playing a significant role in Australia’s urban renewal efforts.
Gamuda Land has invested US$2.8 billion in urban redevelopment projects in Melbourne, contributing substantially to Australia’s housing and infrastructure growth.
“Ironically, while these Malaysian firms are transforming foreign cities, similar efforts in their home country remain sluggish,” he said in a press conference held in conjunction with the three-day Asia Real Estate Leaders (AREL) Study Tour to Melbourne, Australia, recently.
AREL brings together over 180 key stakeholders from Australia and Malaysia’s housing and real estate sectors. The event was organised by the Real Estate and Housing Developers’ Association (Rehda) Malaysia Institute and Monash University.
The study trip aimed to provide Malaysian developers with the opportunity to engage with leading Australian experts in areas such as mixed-use developments, retirement villages, sustainable development, social housing, and urban townships.
For context, Gamuda Land is currently developing "The Canopy on Normanby," located in an up-and-coming precinct within Fishermans Bend, which is Australia's largest urban renewal project, covering approximately 480 hectares.
Meanwhile, S P Setia has been actively involved in urban redevelopment projects in Australia, particularly in Melbourne, with Sapphire by the Gardens set to become a landmark in the city.
Nga pointed out that Malaysian developers such as Gamuda, SP Setia, Sime Darby and OSK have successfully established a presence in Melbourne and other Australian cities.
“OSK's Melbourne Square development, valued at AU$2 billion, is one of the city's largest and most significant mixed-use developments. With over 1,400 apartments and 10,000 square metres of retail space, it stands as a testament to the expertise of Malaysian developers in delicering world-class projects,” he said.
Urban Renewal Challenges in Malaysia
Back home, the Town and Country Planning Department (PLANMalaysia) and Kuala Lumpur City Hall have identified 534 areas suitable for urban renewal, covering four key aspects: redevelopment, regeneration, rejuvenation, and preservation.
“Malaysia has hundreds of ageing buildings, many of which were built before Merdeka. Based on consultation with the Fire and Rescue Department of Malaysia, many of these structures, particularly old flats and public housing schemes, have a lifespan of about 70 to 80 years.
“Deteriorating wiring systems, fire hazards, and poor living conditions pose serious risks to residents,” Nga stressed.
To emphasise the urgency of urban renewal, the ministry plans to launch a nationwide road tour, inviting Members of Parliament to visit dilapidated sites requiring immediate redevelopment alongside successful renewal projects.
“This will allow them to see what is before and after impact of urban renewal,” he said.
Urban Renewal Consent Threshold
One of the most contentious issues surrounding the URA is the consent threshold, with critics arguing that it may marginalise the Malay communities and the bottom 40 per cent (B40) and middle 40 per cent (M40) income groups in urban areas.
Nga clarified that the proposed URA will require 80 per cent approval for urban renewal projects, aligning with Singapore’s standard. In comparison, Melbourne has a 75 per cent threshold for strata properties, while Tokyo and Shanghai require a two-thirds majority.
“Malaysia’s URA is more embracing compared to the other countries as it even covers abandoned projects. In such cases, the government plans to lower the consent threshold to 51 per cent to expedite redevelopment as some developers have fled, and in certain instances, you can't even find who the owner is,” he added.
Encouraging Developers to Reinvest in Malaysia
Commenting on the developers abroad, Nga said that the government has called on major institutional investors to reallocate at least 70 per cent of their investment portfolio back to Malaysia to stimulate domestic investment.
“Permodalan Nasional Bhd is a shareholder of S P Setia, and we have urged it to scale back overseas projects and focus more on domestic redevelopment efforts.
“The goal is to create greater demand for the ringgit and strengthen the economy by ensuring Malaysian developers prioritise local projects. With an estimated RM5 billion in new projects in Australia, the government has suggested redirecting at least RM2 billion of these investments back to Malaysia,” he added.
-- BERNAMA
