Kuala Lumpur is becoming increasingly popular as a destination for GCC investors buying residential property abroad, according to the property investment company IP Global.
The company has ranked the Malaysian capital, along with London and New York, as its "bright" destinations for investment in homes in its latest property barometer.
"Kuala Lumpur is an increasingly popular destination for GCC real estate investors," said Robert Pearce, the director of IP Global.
"No doubt in part due to a number of important cross-cultural links, but also because of strong GDP, export growth, FDI [foreign direct investment] and urbanisation numbers coming from the Malaysian economy, Malaysia's real estate market compares favourably to other countries in South East Asia, particularly considering that the residential property sector is one of the most affordable in the region relative to per capita income."
As values and rental rates remained stable in Kuala Lumpur, the average yield for upmarket condominiums remained stable at 5.2 per cent in the fourth quarter of last year.
"Prices [per sq ft] of new launches [in Kuala Lumpur] will continue to rise due to the increase in land and building costs and developers are expected to be more innovative in their design to differentiate themselves," analysts at Jones Lang LaSalle said in a report last month.
"Many high-end property investors have strong holding power and should be able to weather short-term downwards pressure on rentals, thus capital values of many developments are expected to remain stable in the short term."
Prague, Hong Kong and Athens are described as having "cloudy" property markets IP Global said. San Francisco and Istanbul are rated as "fair".
"Historically, London has been a popular destination for Middle East investors to deploy capital into real estate assets," said Mr Pearce. Throughout last year the number of transactions by Middle East investors increased in both the residential and commercial sectors, driven in part by the London property market's perception as a "haven", he said.
"The strong legal framework that underpins the UK property market, efficient tax structures for foreign investors and short supply of quality properties … are also important factors driving investment."