Positive prospects for industrial property sector

PETALING JAYA: The outlook for Malaysia’s industrial property sector remains positive moving into 2020, supported by various initiatives announced in Budget 2020, said Knight Frank Malaysia.

In its “Real Estate Highlights 2nd Half of 2019” research report, the property consultancy said it foresees the industrial segment to be the forerunner, particularly in the states of Selangor, Penang and Johor, which are the primary destinations for investment.

“We foresee Selangor and Johor garnering more interest from manufacturers and investors alike. Industrial players have a preference for the Shah Alam–Bukit Jelutong locale due to its strategic positioning with good accessibility and connectivity.

“However, due to scarcity of sizeable land and high land cost, we observed an overspill to other areas. The ongoing West

Coast Expressway (WCE) with an interchange at Banting to be completed by early 2021 has opened up new opportunities for the locality, attracting the attention of major logistics and industrial players,” said Knight Frank Malaysia capital markets executive director Allan Sim.

Growth in the manufacturing sector is expected to regain momentum after slowing in the third quarter of 2019.

Sim also said Malaysia’s readiness as a regional logistics hub is materialising with impactful ongoing projects and initiatives such as the Digital Free Trade Zone, the regional ecommerce and logistics hub at KLIA Aeropolis, the East Coast Rail Link and the WCE.

Knight Frank Penang resident director Tay Tam said in the first nine months of 2019, the state garnered RM13.2 billion in total approved manufacturing investments from 113 projects, surpassing the RM5.78 billion achieved for the entire year in 2018.

“This is a tremendous boost to the state and augurs well for the short- and mediumterm growth of the sector.

“The outlook for 2020 is very positive. In tandem with robust performance of the manufacturing sector and the e-commerce platform, demand for logistics and warehousing facilities is set to grow too,” he added.

Meanwhile in Johor Bahru, according to Iskandar Regional Development Authority, the manufacturing sector was leading the numbers among the sectors and contributed 24% to the total cumulative investment for the region as of June 2019.

Knight Frank Johor branch head Debbie Choy said there were significant industrial transactions in the Port of Tanjung Pelepas and Nusajaya Tech Park.