Hong Kong's ARUP Group International was appointed by 1Malaysia Development Berhad, the government-linked company overseeing the project, last year to act as security and risk engineers, and consultants.

'The Malaysian real estate market is dynamic and has been a successful economic growth driver for Malaysia over the past 20 years,' says Ramu Thanni, a research analyst with business consultancy company Inside Investor. 'The building innovation coupled with good investor returns on investments will keep foreign investors interested in Malaysian property despite uncertainties.'

The KLIFD development is one of 12 national key economic areas outlined in the 10th Malaysia Plan to drive the government's 2020 vision and has helped to ignite a property sector that has been growing steadily over the past two decades.

It is one of many infrastructural and development projects that have allowed investors to take advantage of Malaysia's property market, which has resisted pressure from the debt crisis in the euro zone and United States economic woes.

The continuing Iskandar project in Johor Bahru has changed the face of an area that was once likened to a Wild West town, with significant investment in office buildings, malls, hotels and residential plots on hectares of new land created through reclamation.

Malaysia's administrative capital, Putrajaya, is also set for a fresh look with investors sought to develop vast tracts of land that can be used to build a special economic zone containing commercial property, residential areas and universities.

The commercial real estate market is expected to grow 10 per cent this year, according to analysts, while returns on office rentals are forecast at about 6 per cent.

The residential property market offers strong potential for individual foreign buyers looking either for a home in Malaysia or as an investment that offers good returns.

Property companies are preparing their sales teams to woo foreign buyers, luring potential investors from Hong Kong, Singapore, southern China, Japan, South Korea, Indonesia, India, Saudi Arabia and Qatar.

Malaysia can offer relatively low prices and potentially strong returns, although foreigners are restricted to buying property worth more than 500,000 ringgit and capital gains tax of 10 per cent is levied if the property is sold within five years of purchase.

Real estate agents in Malaysia have been encouraged to complete a Certified International Property Specialist course to arm them with the skills and knowledge to sell to overseas investors, who make up 2 per cent of residential buyers in the country.

Generally, the bulk of the real estate offered is in Kuala Lumpur city centre, Penang and Johor. In the primary market, about 120,000 units have become available each year. However, a thriving secondary market dominated by domestic buyers offers foreigners a bargain.

Another investment avenue is real estate investment trusts (reits), a growing sector with 14 entities established on the national stock exchange.

Reits, providing returns through capital appreciation from price changes and investment income such as rentals, offer accessible investment opportunities for foreigners because they are listed.

'There have been more and more reits listed on the Bursa Malaysia [national stock exchange], indicating confidence in these markets locally and internationally,' Thanni says.

However, Thanni says that while Malaysia's property environment is relatively safe, uncertainties remain.

He says the global slowdown in manufacturing, the euro-zone crisis and its effects on international currencies, and a decline in production as a consequence of Europe's debt affecting manufacturing and exports from the BRICS nations (Brazil, Russia, India, China and South Africa), could destabilise the property market.

'The flight of capital is a major concern as this is the result whenever a globally encompassing incident occurs, such as the financial crisis of 2007-2008,' he says.

'Nevertheless, Malaysian real estate growth has been organic and real estate regulators have been prudent. This gradual price appreciation will maintain investor-confidence with a consistent track record of appreciation.'