SABAH, the second biggest state in Malaysia which is also known as the Land Below the Wind, has progressed, albeit slowly, since achieving independence from the British rule 54 years ago.

Developments in Sabah’s infrastructure, property and tourism sectors started to improve significantly in the last 10 years, making it one of the most sought-after states in Malaysia for investment.

In 2016, the Sabah government had come up with the visionary Sabah Structure Plan 2033 to turn the state into one with a world-class environment for work, study, play, visit, business and investment.

Chief Minister Tan Sri Musa Aman said the state government is fully committed to bringing economic development and progress to the state through the development of key industrial clusters, such as agriculture, oil and gas, manufacturing and tourism.

“Government programmes, such as Public Private Partnership and Entry Point Projects, are the initiatives by the federal government to attract private investors to partner in developing government projects.” -- Tan Sri Musa Aman, Sabah Chief Minister

He said transforming into a high-income economy will involve improving basic infrastructure, encouraging downstream activities and production of high quality goods and services as well as capitalising on human resources with multiple skills and competencies to address future challenges.

Implementation of projects, such as the Pan-Borneo Highway, Kota Kinabalu transportation master plan and Sabah International Convention Centre, is ongoing to improve infrastructure in the state.

When completed, the projects will provide strong impetus for Sabah’s economic transformation in the coming years, Musa told NST Property recently.


Increased private investments and expansion of the tourism industry in Sabah have led to a booming property market in Kota Kinabalu, attracting a lot of investors from Peninsular Malaysia and some Asia Pacific countries.

State Local Government and Housing Minister Datuk Hajiji Noor said last year that the property market had been resilient between 2008 and 2014.

Sutera Harbour Resort.

Between 2015 and 2016, there were major changes in the city landscape thanks to the completion of several large-scale integrated developments like the Imago shopping mall, Loft apartments, Riverson Suites, Gleneagles private hospital, the Oceanus shopping mall and Pelagos Suites.

Ongoing developments in Kota Kinabalu include Aeropod Tanjung Aru by SP Setia Bhd, Sutera Avenue and PacifiCity. The 24.28ha integrated development and transportation hub is anchored by offices, a 300,000-sq-ft lifestyle retail mall, world-class hotels, serviced apartments, luxury residences, SOVO (small office virtual office) and a modern railway station. The project, which has a gross development value of RM1.8 billion, is expected to be completed by 2022.

Oceanus Shopping Mall.

Sutera Harbour Resort (SHR), which was established more than 10 years ago and located nearby Kota Kinabalu International Airport (KKIA), is expanding and launching its maiden residential project this year.

Kota Kinabalu International Airport.

Gilbert Ee, the chief executive officer of GSH Corp Ltd which owns SHR, said Kota Kinabalu is a rising property hotspot in Malaysia and there is robust potential for luxury real estate in the city.

“There is strong interest from South Korea, Japan, Hong Kong and China investors who want to buy a piece of residential properties in Kota Kinabalu. There is also very encouraging interest from Malaysians and Singaporeans.

“We feel the timing is just right to launch our flagship residential project in SHR. The market is ready to accept such a product,” he told NST Property.


The chief minister said under the 9th, 10th and 11th Malaysia plans, the federal government had channelled RM2.3 billion into the Sabah Economic Development and Investment Authority (SEDIA) for Sabah Development Corridor (SDC) projects as at October 31 2017.

He said RM2.1 billion, or 91.7 per cent of these allocations, had been disbursed by SEDIA for infrastructure works, such as the upgrading of roads and public amenities as well as poverty eradication projects like the Agropolitan Pitas project.

“This has improved the road connectivity from urban to rural areas, giving rise to more businesses, access to education for rural folks and transportation of goods, to name a few.

Popular park in Kota Kinabalu.

“Sabah is expected to maintain a stronger GDP (gross domestic product)growth rate of between five and 5.5 percent as the world’s economy and commodity prices recover,” said Musa.

He said in order to spur the economic development of a country, collaborations and partnerships between governments and private investors are pertinent.

“Government programmes, such as Public Private Partnership and Entry Point Projects, are the initiatives by the federal government to attract private investors to partner in developing government projects.”

The Sabah International Convention Centre, Kimanis Power Plant and the Bus Rapid Transit are some examples of such programmes, he said.

The Kimanis Power Plant has been in operations since 2013.

Other projects are progressing slowly with minor hiccups that have caused short delays in their target completion, Musa said, adding, however, that the government will facilitate, where possible, to expedite the implementation.

He said the upgrading of Sapangar Bay Container Port, the Air Freight and Aviation Masterplan Study, the Tanjung Aru Eco Development project, the Pan Borneo Highway, the Sabah Animation and Creative Centre and the Sabah Agro-Industrial Precinct is set for Sabah to be one of the premier investment destinations for business, culture and nature in the East Asian region.


Musa said the infrastructure, tourism and property sectors are the booming industries for Sabah. However, the state lacks four- and five-star hotels.

“This is an incentive for property developers to construct more hotels in Sabah. The Marriot, Best Western and Hotel Inn chains are currently in construction. Majority of the foreign investors are from Singapore, China and Europe,” he said.

The chief minister said the state government is working closely with the federal government in developing the tourism and property sectors as the segments are seen as among the main economic drivers and contributors to the state’s GDP.

It was announced in the 2018 Budget special funds and incentives and the Sabah government will take the opportunity to leverage it, he said.

The special funds and incentives include Visit Malaysia Year 2020, SME Tourism Fund with interest subsidy of two per cent, Tourism Infrastructure Development Fund (RM1 billion), tourism promotion and development programme (RM500 million) as well as tax incentives for investments in new four- and five-star hotels being extended for two years and that for tour operating companies to December 31 2020.

Musa said the state is also taking its own initiatives, such as by encouraging foreign investors to partner with local companies in tourism projects and via promotions of Malaysia My Second Home (MM2H).

“Under the SDC programme, special tax incentives are offered for tourism projects in the Kinabalu Gold Coast Enclave. Sustainability and inclusivity is a strong theme for tourism development in the SDC initiative.

“There is still much to do specifically on connectivity and logistics. That is why SEDIA, under the 11th Malaysia Plan, will work together with the government, industries and private players to enhance connectivity by air, sea and land as well as via telecommunications.”

Musa added that a few projects are in planning and expected to take off this year and in the coming years, which will change the landscape of Sabah and Malaysia as a whole.

Part 2 next week

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