Malaysia’s robust industrial property sector reinforce an otherwise bleak outlook for 2021

“New manufacturing investments are expected to remain encouraging in 2021,” forecasts CBRE | WTW 

The industrial property sector in Malaysia continues to serve as a ray of light in the country’s glum real estate, whilst hospitality, retail, and other tourism-reliant sectors battle the harsh effects of the pandemic, shared Foo Geen Jen, the group managing director of CBRE | WTW, during the press launch of ‘Restart the Uneven Recovery’ Real Estate Market Outlook 2021 report.

In the long term, the main prospects for real estate are regional logistics and warehousing, revealed Foo. He said that “the growing demand for last-mile delivery facilities is in line with the expansion of e-commerce and the expectations of an increasingly sophisticated market.”

According to the report, the e-commerce sector grew rapidly, accumulating over MYR100 billion (USD24.7 billion) worth of investments in 2020, whereas warehouse and logistics, as well data centres also experienced a rise in demand. 

“Data centres are a niche sector that has received many enquiries in recent years amid digitalisation, with the main contributors being Industrial Revolution 4.0 and e-commerce. As Malaysia is very stable in terms of geography, we are well-positioned for data centres,” said Foo.

Meanwhile, CBRE | WTW director Jonathan Lo believes that the construction of the Singapore-Johor Bahru Rapid Transit System (RTS), which began last November and is targeted to commence passenger services by end of 2026, will have an impact on the majority of real estate subsectors, including hospitality and residential, logistics and manufacturing, tourism, and retail. 

“The kick-off of the RTS is going to boost investor confidence in Iskandar Malaysia,” he added.

In Penang, CBRE | WTW director Peh Seng Yee anticipates more purpose-built worker dormitories to pop up around Seberang Perai’s major industrial parks. He explained that “new manufacturing investments are expected to remain encouraging in 2021. Transaction activities are expected to remain active, while prices and rents remain stable amid the pandemic.”

The industrial sector in Sarawak, on the other hand, is forecasted to remain stable this year due to the government’s ongoing support for small and medium enterprises, said Robert K S Ting, managing director of C H Williams Talhar Wong & Yeo Sdn Bhd.

More: Malaysia real estate market prospects 2021

“Despite the temporary slowdown in this sector, the supply chain, logistics, warehousing, and distribution hubs still play an important role and see increased demand,” said Robert.

Other industrial projects that are set to take advantage of the growth potential not only in Penang and Sarawak, but across the country include the 2020 PropertyGuru Asia Property Awards (Malaysia) Best Industrial Developer winner AME Development Sdn Bhd and Best Industrial Development titleholder i-Park@Senai Airport City by iPark Development Sdn Bhd. 

As for the forecasted outlook of Malaysia’s economy, Foo said: “Generally, we believe the economy’s recovery will either be K- or W-shaped. In the K-shaped recovery, some sectors will do better while others will not, whereas, in the W-shaped recovery, things will yo-yo and go up and down, depending on the COVID-19 situation.”

With such an optimistic outlook, it’s just a matter of time for Malaysia’s real estate market to completely bounce back. Major corporations have already kicked it up a notch by swiftly coming up with innovations and processes to thrive in the midst of the pandemic.

Malaysia’s finest developers, developments, and designs will be honoured at the forthcoming 8th PropertyGuru Asia Property Awards (Malaysia), presented by regional platinum sponsor Kohler. Nominations from the general public are accepted before 9 July 2021. For more details, visit asiapropertyawards.com/award/asia-property-awards-malaysia.