The industrial property sector is expected to remain active for the rest of this year, supported by foreign direct investment inflows.

Knight Frank Malaysia in a recent statement said the launch of Industry4WRD late last year in response to the digital transformation of the manufacturing sector and its related services will pave the way for the country.

The property consultancy said the Klang Valley, Penang and Johor will be primary destinations for investments.

In the same statement, Knight Frank Malaysia capital markets executive director Allan Sim said there was tremendous growth in foreign investments within the Klang Valley in the first half of 2019, driven mainly by robust performance in the manufacturing sector.

“With semiconductors and electrical and electronics players looking to expand within Malaysia, we anticipate more construction activities of factories and warehouses to cater to the relocation and expansion of these foreign manufacturers.”

He said the e-commerce logistics warehousing sector is “another exciting chapter to watch out for”.

“Recall the joint venture between Malaysia Airports and Cainiao in relation to the 1.2 million sq ft air logistics hub within the Digital Free Trade Zone. The facility is slated for completion by year-end and we expect to see further activities in the e-commerce warehousing and logistics market,” he said.

According to the Valuation and Property Services Department (JPPH) in its Property Market Report 2018, the industrial property sub-sector recorded 6,032 transactions worth RM15.01bil in 2018, which was an increase of 5.4% and 28.9% in volume and value compared to the year before. It said the prices of industrial properties showed a “mixed performance”.

“Johor recorded several negative, double-digit price changes, especially in the Tampoi area. While in Penang, property in the South-west district showed a better price change due to limited supply for the property type,” it said.

Meanwhile, Knight Frank Penang executive director Tay Tam said the attraction of Penang can be attributed to the state’s robust supply chain, with several players home-grown as well as its strong talent pool, well-established infrastructure and good support services to investors.

“Industrial properties within the matured Bayan Lepas Industrial Park continues to be in demand while several multinational companies have set up operations in the newer Batu Kawan Industrial Park which includes several existing manufacturers from the island.

“The industrial sector outlook for Penang looks good over the medium to longer term,” he said in a statement.

As for the Johor market, Knight Frank Johor branch head Debbie Choy said the expansion of Iskandar Malaysia’s boundaries is expected to generate more job opportunities and enhance export volume.

“The industrial sector continues to show positive sentiments as we continuously receive active enquiries for warehouse/manufacturing space.

“Johor is well connected for both imports and exports via three sea ports and an international airport. This is one of the reasons that Johor will house the world’s biggest ship-to-ship hub,” she said.

Source: TheStar.com.my