_Malaysia Real Estate Highlights - 1st Half of 2018 report launches today
Malaysia is home to multiple regional distribution centres for multinational companies (MNCs) in facilitating their distribution network for the Asean region, with the likes of IKEA setting up their third largest global distribution centre in Pulau Indah.
This is atop of other MNCs that have or are in the midst of the setting up their regional distribution centres in key states of Penang, Johor and Klang Valley, i.e. Nestle, BMW, Volkswagen, Bosch, Broadcom, Sports Direct and Lazada.
The above trend is also partly attributable to our business-friendly government initiatives that have helped boost Malaysia’s regional presence within the Asean region.
Key initiatives such as the Principal Hub incentive spearheaded by the Malaysian Development Investment Authority (MIDA), has attracted numerous global entities to use Malaysia as a base for conducting its regional or global businesses and operations.
Other notable trends that are becoming more prevalent in the industrial property sector include built-to-suit facilities that offer one-stop solutions to end users to operate in customized facilities through a long-term lease arrangement.
In addition, multi-storey warehouses which are prevalent in countries such as Singapore, are also increasingly gaining popularity in Malaysia due to surging city industrial land prices in recent years.
Allan Sim, Executive Director of Capital Markets in Knight Frank Malaysia, says, "The industrial property sector presents a popular alternative asset class for developers and investors compared to traditional residential and commercial (office and retail) markets. Moving forward, we expect to see more township developments with industrial components, business parks and logistics hubs being built."
The active participation of key industrial and logistics players, both local and foreign, bodes well for the local industrial property market, aligning with Malaysia’s need for better quality warehouses and state-of-the-art factories.
With the anticipation of the current government to continue with the development of e-commerce initiative, the demand for larger Class-A warehouse facilities will increase.
Automation is also expected to play a major role in these sophisticated warehouses, as the country moves to embrace the Industry 4.0 revolution.
Overall, the growth trend for Malaysia’s industrial property sector continues to be promising. The recent report on Airbus SE’s principle agreement to conduct feasibility study for investment to build a final assembly line in Negeri Sembilan is encouraging evidence of the above.