Bright Spot in Property Market

Posted on: 2020-02-07


Petaling Jaya : While the property industry may still be in a slump, the industrial sub-sector seems to be an exception, with some property consultants calling it a “bright spot.”

At a media briefing earlier this month, CBRE | WTW managing director Foo Gee Jen the local industrial sector had been recording positive growth over the last two years.

“The growth has been driven by increasing demand for larger warehouses that cater for the last-mile delivery, ” he said.

According to CBRE | WTW’s Real Estate Market Outlook Report 2020, growing demand for last-mile deliveries are in line with the expansion of e-commerce.

“Efficiency and accessibility will top as the main criteria for logistics players to match the needs between air or sea ports and end users, ” it said.

It said the Klang Valley remained the top three regions for investment in Malaysia.

“From January to September 2019, the Klang Valley attracted RM16.59bil of approved investments or 28.8% of total approved investments. Foreign interest constituted RM11.17bil of the investments.”

Foo is optimistic about the growth prospects for the industrial sub-sector, going forward.

“Over the next five years, we expect to see more large warehouses being built, ” he said, adding that Peninsular Malaysia has been considered as an ideal central hub for logistics within Asean.

CBRE | WTW’s Real Estate Market Outlook Report 2020 highlighted that the government allocation of RM50mil for the repair and maintenance of roads to Port Klang at Budget 2020 will boost the local industrial sector further.

“To improve the movement of cargo between Serendah and Port Klang, the feasibility study on the proposed rail bypass is expected to kick-start next year.

“Potential industrial growth along the railway route would be on the watchlist, ” it said.

As for Penang, the report said the encouraging manufacturing investment trend is expected to extend to 2020 and sustain the industrial property sector.

“Acquisition, disposal and leasing activities will be prompted by the continuous new investment and re-investment, ongoing corporate restructuring, fluctuating global demand and supply and technology advancement such as Industry 4.0.

“Prices and rentals are anticipated to be stable, ” it said.

As for Johor, the report said the industrial market in the region remains optimistic, supported by the continuously inflow of approved investments and active transaction activities.

“Overall, the rental for industrial properties in the region remains stable, generally in the range of RM1 to RM1.80 per sq ft for new industrial parks, while the rentals for factories located in old industrial areas range from 80 sen to RM1.40 per sq ft.”

Meanwhile, Rahim & Co in its 2019/ 2020 Property market review said Selangor held the highest number of industrial property units and is considered the pioneer industrial hub of Malaysia.

“In the near future, 1,069 industrial units are well on its way into the market and primarily terraced, semi-detached and detached types. To add context, overhang statistics for the sector is relatively low at only 35 units of which all are semi-detaches priced above RM1mil.”

It added that as technology plays a more pivotal role, the industrial sector is expected to move forward especially within the logistics sector.

“Interest within this sector have seen further spike with the likes of major infrastructure projects resuming, like the East Coast Rail Link which would enhance the linkage between the west coast and the east coast of Peninsular Malaysia.

“Adoption of Industrial Revolution 4.0 technologies like P2P platforms, crowdfunding, artificial intelligence and social media will continue to shape the property industry into the next decade.”



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