MALAYSIAN property developers are leading major urban renewal projects in Australia, yet efforts to address the country’s own urban renewal issues remain stagnant, said Minister of Housing and Local Government Nga Kor Ming.
Speaking in a recent press conference, Nga highlighted the significant role Malaysian developers such as S P Setia Bhd and Gamuda Bhd’s property arm, Gamuda Land, are playing in Australia’s urban redevelopment, with Gamuda Land alone investing a substantial RM12.45 billion (US$2.8 billion) in Melbourne’s ongoing urban transformation.
“Ironically, while these Malaysian firms are shaping foreign cities, similar progress in Malaysia remains sluggish,” Bernama cited Nga saying, drawing attention to the discrepancy between the international success of local developers and the challenges faced at home.
The comments come ahead of the anticipated introduction of the Urban Renewal Act (URA) in Malaysia’s Parliament, which is set for tabling in July. The URA has sparked intense debates, particularly regarding the percentage of Bumiputera ownership and concerns over the potential for displacement due to the “en bloc” sale of entire strata developments.
The Urban Renewal Act is seen as a critical tool for tackling Malaysia’s rapidly deteriorating low-cost housing sector, but its delayed implementation has raised concerns, particularly among developers and homeowners who fear negative impacts from the proposed regulations.
Malaysian property developers have established a prominent presence in Australia, particularly in Melbourne, a city undergoing major redevelopment. Gamuda Land is currently spearheading “The Canopy on Normanby,” an ambitious project located within Fishermans Bend, Australia’s largest urban renewal area, spanning 480 hectares.
Similarly, S P Setia has been actively engaged in several Melbourne-based projects, with its “Sapphire by the Gardens” development set to become a landmark in the city.
Nga pointed out that other major Malaysian developers, including Sime Darby and OSK, have made significant contributions to the Australian property market. OSK’s Melbourne Square development, valued at AU$2 billion, is one of the largest mixed-use developments in the city, encompassing over 1,400 apartments and 10,000 square metres of retail space.
“These projects stand as a testament to the expertise of Malaysian developers in delivering world-class urban developments,” Nga said.
Despite the success of these developers abroad, Malaysia faces significant challenges in its own urban renewal efforts. The Town and Country Planning Department (PLANMalaysia) and Kuala Lumpur City Hall have identified 534 areas across the country in need of urban revitalisation. These sites cover a broad range of urban renewal activities, including redevelopment, regeneration, rejuvenation, and preservation.
“Malaysia has hundreds of ageing buildings, many of which were constructed before independence. These structures, especially old flats and public housing schemes, have reached the end of their lifespans. Many of these buildings suffer from deteriorating wiring, fire hazards, and poor living conditions,” Nga stressed.
The government has highlighted the urgent need for action, with plans for a nationwide road tour to raise awareness among Members of Parliament regarding the dilapidated sites requiring immediate redevelopment.
The initiative aims to showcase the transformation that urban renewal can bring.
A key point of contention surrounding the URA is the consent threshold required for urban renewal projects. Critics have raised concerns that the threshold could disproportionately affect the Malay community and lower-income groups, such as the B40 and M40 income brackets.
Nga clarified that the proposed URA would require 80 per cent approval for urban renewal projects, aligning with the standards of Singapore. In comparison, Melbourne requires 75 per cent approval for strata properties, while Tokyo and Shanghai only need a two-thirds majority.
“Malaysia’s URA is more inclusive compared to other countries as it even covers abandoned projects,” Nga explained. “In such cases, the government plans to lower the consent threshold to 51 per cent to expedite redevelopment, particularly when developers have abandoned projects or when ownership is unclear.”
Nga also addressed the growing trend of Malaysian developers focusing their efforts overseas, particularly in Australia. The government has called on major institutional investors to redirect a significant portion of their portfolios back to domestic projects.
“Permodalan Nasional Bhd, which is a shareholder in S P Setia, has been urged to scale back its overseas ventures and focus on local redevelopment efforts,” Nga said. He further suggested that Malaysian developers should invest at least RM2 billion of the RM5 billion currently allocated for new projects in Australia back into Malaysia’s urban renewal sector.
The government’s call aims to strengthen the Malaysian economy by ensuring that developers prioritise local projects, which in turn would create greater demand for the ringgit and stimulate domestic investment.
Despite the impressive success of Malaysian property developers on the global stage, the challenges of addressing urban renewal and dilapidated housing in Malaysia remain pressing.
As debates around the URA continue, the government’s efforts to encourage developers to focus more on local projects could be pivotal in ensuring that Malaysia’s urban renewal issues are addressed effectively. – March 17, 2025
