The Malaysian industrial market is experiencing a significant boost as international players continue to enter the market, driven by the global supply chain diversification strategy known as China Plus One. This strategic shift, aimed at reducing dependency on China by diversifying sourcing and production locations, has been a key factor in attracting global companies to Malaysia.
Growth in KL’s Industrial Market
According to JLL Malaysia’s 2Q2024 Greater Kuala Lumpur Property Market Monitor, launched on Wednesday, the Kuala Lumpur industrial market witnessed substantial activity in the first half of 2024 (1H2024). Despite a cautious approach from manufacturers regarding the expansion of storage space due to rising costs, the market saw the completion of approximately 1.2 million sq ft of new warehouse space. These newly developed spaces are recording near-full occupancy, primarily by third-party logistics (3PL) companies, fast-moving consumer goods (FMCG) companies, and e-commerce players.
Key Completions and Upcoming Developments
Two major warehouse projects in Selangor contributed significantly to this expansion: E-Metro Logistics Park Metrohub 2 in Klang, adding 800,000 sq ft, and Atrium Shah Alam 4, contributing 338,417 sq ft. These developments have been crucial in accommodating the growing demand for high-quality, sustainable warehouse facilities.
Looking ahead, the development pipeline remains robust, with an additional 2.8 million sq ft of warehouse space expected to come online by the end of 2024. These upcoming developments are set to provide modern, sustainable assets that are increasingly attractive to contemporary warehouse users.
Positive Outlook Amid Global Trade Shifts
The outlook for Malaysia’s industrial market remains positive, bolstered by the ongoing US-China trade tensions and the resulting China Plus One strategy. Continuous demand for warehouse space is anticipated, particularly from 3PL companies and manufacturers in key industries such as electrical and electronics, automotive, cold storage logistics, and healthcare/pharmaceuticals.
Conclusion
Malaysia’s industrial market is capitalizing on global supply chain shifts, with significant new warehouse space being developed and rapidly occupied by key players across various industries. As the China Plus One strategy continues to influence global trade dynamics, Malaysia is well-positioned to benefit from the increased demand for industrial real estate, making it a crucial hub in the global supply chain network.
