Currently, there are more than 4m sq ft of warehousing spaces coming on stream in Klang Valley, according to Knight Frank Malaysia
by ASILA JALIL/ pic by BERNAMA
A HIGHER demand for logistics and warehousing spaces is expected following growth in logistics services due to increasing global e-commerce trade and consumer spending.
Knight Frank Malaysia Sdn Bhd’s Retail Highlights for Second Half of 2019 (2H19) showed that more than four million sq ft of warehousing spaces are coming on stream in the Klang Valley with notable under construction projects, including flattened warehousing at Hap Seng Industrial [email protected] Alam and Ikea Distribution Centre in Pulau Indah, Selangor.
“Moving forward, the exponential growth in Malaysia’s e-commerce sector will likely provide a strong tailwind for businesses of logistics companies which will in turn increase the demand of logistics or warehousing spaces.
“Budget 2020 also provides supports to the logistics sector with the allocation of RM50 million for the repair and maintenance of roads leading to Port Klang,” the report stated.
It reviewed the property market performance across the Klang Valley, Penang, Johor Baru and Kota Kinabalu.
The revival of notable mega infrastructure projects in 2019, such as the East Coast Rail Link (ECRL) and Bandar Malaysia — which will house the Kuala Lumpur (KL)-Singapore high speed rail — improves market sentiments and restores investors’ confidence.
Knight Frank Malaysia ED of capital markets Allan Sim said in a statement that growth in the manufacturing sector is also expected to regain momentum in 2020 after slowing to 3.6% in the third quarter of 2019 (3Q19) versus 4.3% in 2Q19.
“These revived projects point to more clarity in government policies and are a boon to the country’s economy and construction sector.
“We foresee Selangor and Johor garnering more interest from manufacturers and investors alike,” he said.
The report also stated that the ongoing US-China trade war is widely viewed to delay growth and weigh down on export-oriented countries such as Malaysia.
However, the trade war also creates opportunities for trade and investment diversions to South- East Asian countries like Vietnam and Malaysia.
Meanwhile, Penang was the top recipient of foreign direct investment inflows into Malaysia as it received RM13.2 billion in approved manufacturing investments from 113 projects in the first nine months of 2019. The RM13.2 billion surpassed the amount achieved for the entire year in 2018, which totalled RM5.78 billion.
Knight Frank Malaysia resident director Tay Tam said it is a tremendous boost to the state and augurs well for the short- and medium-term 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 in the coming year too,” said Tam.
Meanwhile, the report also showed that the residential market is making a slow comeback following several new launches in 2H19.
The Tun Razak Exchange (TRX) saw the completion of Menara Prudential and Exchange 106, while Core [email protected] by Core Precious Development Sdn Bhd was launched last year.
The new launches are selling between RM1,900 per sq ft and RM2,200 per sq ft on average.
“KL high-end residential market is believed to have bottomed out mid last year, and this has set the right mood for the segment to make its way back slowly — evident by the higher number of launches in the 2H19,” said Knight Frank Malaysia MD Sarkunan Subramaniam in a statement.
He said there is an increase in foreign buyers’ interest in Malaysian properties. Knight Frank anticipates more new launches and transaction in the prime areas of KL.
It also noted that several key policies announced under Budget 2020 are expected to further stimulate the market.