PETALING JAYA: Demand for industrial property space, which has been picking up significantly over the years, is set to get a further boost following the announcement of the 13th Malaysia Plan (13MP) in July.
Zerin Properties chief executive officer Previn Singhe noted that the 13MP’s emphasis on high-value manufacturing, the National Semiconductor Strategy and the halal industry ecosystem will fuel demand for advanced industrial parks, particularly for electrical and electronics, logistics and halal-related industries.
“Incentives for Industry 4.0 adoption including robotics, additive manufacturing and digital twins, together with research and development (R&D) tax credits and joint ventures with global chipmakers will further strengthen Malaysia’s semiconductor ecosystem,” he told StarBiz.
At the same time, Previn said green manufacturing initiatives such as energy-efficiency grants, circular economy pilots and carbon footprint labelling will raise sustainability standards across industrial clusters.
“The push for 700,000 new manufacturing jobs and 500,000 in the digital economy will create demand for logistics hubs, R&D spaces and data centres.
“Meanwhile, the commitment to 98% 5G coverage and an artificial intelligence (AI)-driven ecosystem will accelerate the growth of tech parks and flexible co-working environments, turning Malaysia into a serious player in the regional digital economy.”
According to Knight Frank in its “Real Estate Highlights for the first half of 2025” report, warehousing space supply within the Klang Valley increased by 360,000 sq ft in the first half of this year.
It is anticipated that the warehousing space will increase by an addition of 4.2 million sq ft in the remainder of the year, mainly contributed by the Shah Alam International Logistics Hub.
Phase 1 is estimated to have a net lettable area of 2.8 million sq ft.
Siva Shanker, director of real estate agency Rahim & Co International Sdn Bhd, said many players have “hopped onto the industrial property bandwagon” over the years.
The industrial property segment has, in a sense, become its own worst enemy.
“Many years of steady and strong growth have resulted in new players entering the market.
“Many of them are not even industrial sector players but have chosen to expand into this segment.”
As such, Siva said the level of vacancies for warehouses is expected to “go up a bit.”
“There is a bit more speculation in this sector now. In that, many players are buying not for owner-occupation, but to buy and then sell for profit.”
Siva said good grade A industrial space – those that come equipped with high-level tech and automation – will always remain popular.
“This is compared to empty store rooms where it is up to the tenant to do whatever they want with the space.”
Siva noted that managed industrial parks will be the “next big thing” going forward.
“These are really large, gated and guarded (almost resort-like) spaces with grade A buildings, workers’ quarters with an emphasis on environmental, social and governance attributes.”
Meanwhile, Knight Frank said infrastructure development continues to act as a catalyst for industrial real estate growth.
“Major projects, including the East Coast Rail Link (ECRL), are expected to significantly enhance regional connectivity and boost demand for industrial space.
“These, along with improvements such as the double-tracking of the ECRL’s Port Klang segment, are likely to boost demand for industrial land and logistics facilities along key transport corridors.”
Knight Frank noted also that sustainability and technology integration are becoming increasingly critical to the sector’s evolution.
“The deployment of 5G connectivity in industrial zones, the growing adoption of AI and automation and an emphasis on green building practices are set to reshape how industrial spaces are designed, operated and valued in the years ahead.”
In the manufacturing sector, Knight Frank said stabilisation is anticipated in the latter half of the year, following a period of softening demand in early 2025 –buoyed by resilient domestic demand, sustained investment activity and government-led initiatives promoting high-value manufacturing and green industrialisation.
“Nevertheless, global headwinds may temper growth prospects.”
To maintain its competitiveness and meet evolving industry requirements, Knight Frank said state agencies and stakeholders may consider proactive planning to facilitate the development of more diverse industrial offerings.
“This includes ensuring infrastructure readiness, encouraging the release of suitable land parcels and supporting investment in high-specification factory units to cater to both domestic and foreign industrial occupiers,” it said.
