Malaysia is located in one of the most productive, export oriented corners of the world. Malaysia’s trade patterns have changed noticeably since China joined the World Trade Organization in 2001. Greater China is becoming an increasingly important trading partner for Malaysia. Internal Asian trade is expanding rapidly. Malaysia is a member the of Association of South-East Asian Nations (ASEAN), which in recent years has put renewed energy into the removal of trade barriers between member countries. With Malaysia’s economic growth expected to closely follow that of the region, demand for industrial space in the country is poised to grow.
There is a close correlation in Malaysia between exports and imports because of the high imported content of the country’s exports, but this link will gradually weaken as the production structure changes. The country’s industrial real estate market is largely tied to small and medium enterprises, light and heavy manufacturing and logistics as well as distribution activities. The logistics and distribution sectors are growing fast and are expected to generate more demand for warehouse space.
The manufacturing industry in Malaysia is expected to remain robust, and it is anticipated that more manufacturers will turn to logistics outsourcing solutions to free up resources so they can focus on their core business. This will in turn drive the demand for logistics properties.
The demand for logistics services is concentrated around the port areas encompassing North Port/ West Port of Klang and areas within Subang, Shah Alam and Petaling Jaya as well as the Kuala Lumpur International Airport. Industrial parks in Shah Alam and Subang – which are well served by transportation networks – enjoy relatively high occupancy rates. The supply of quality logistics facilities is expected to remain limited, and we expect to see a rise in the trend towards built-to-suit facilities engendered by the expansion plans of major logistics players.
Source: The Economist Intelligence Unit, Country Forecast, Malaysia