Knight Frank Malaysia projects a promising year ahead for the leasing activity of prime logistics warehouses, particularly in the Klang Valley, Johor Bahru, and Penang. According to Allan Sim, Executive Director of Land and Industrial Solutions at Knight Frank Malaysia, the sector is set to experience rental growth in 2024, attributed to the tight availability of grade A warehouses coupled with strong leasing demand.
Sim explains that the anticipated rental growth stems from landlords’ resistance to lower rental rates due to escalating construction and financing costs. This resilience in the face of global economic fluctuations signifies the robust nature of Malaysia’s logistics industry, which continues to innovate and adapt to meet the evolving needs of occupiers.
A key driver for the increased demand for logistics space is the expected global recovery in the semi-conductor industry, particularly benefiting regions like Penang, Kulim, Melaka, and Selangor. The upcoming completion of higher-end grade A warehouses in 2024 further underscores the landlords’ commitment to high-quality specifications without compromising on rental rates.
Sim also highlights the trend of landlords redeveloping older factories and warehouses into modern, higher-specification facilities. However, he notes that the performance of rental rates will ultimately depend on the flow of foreign direct investment (FDI) and domestic direct investment (DDI) in 2024.
Looking forward, Knight Frank Malaysia maintains an optimistic outlook for the logistics sector in Malaysia, emphasizing the country’s resilience and strategic position within the Asia-Pacific region. This positive forecast underscores Malaysia’s potential to continue thriving as a key player in the logistics and warehousing industry amidst external headwinds and challenges.
