Commercial, industrial, and logistics property transactions will continue to climb next year, but modestly, according to Irhamy Ahmad MRICS, Chartered Valuation Surveyor and CEO and Founder of Irhamy Valuers International.
Growth will resume at a rate more in line with the historical norm as a result of the larger base comparisons, as the country moves through the extremely low statistics of 2020 and 2021, he said.
Irhamy said the industrial market is growing due to the rise of e-commerce and increased investment by foreign manufacturers.
Infrastructure initiatives like those related to telecommunications, transit, and renewable energy are the main drivers of activity, he said.
In the first half of 2022, all-sector property transaction volume climbed more than 36 per cent.
Commercial and Industrial transactions account for 29.3 per cent of total transaction value, equivalent to about RM24.77 billion in the first half of the year, he said.
Irhamy said the number of commercial transactions increased in all price ranges, with the highest price band also demonstrating the highest rate of growth at 54 per cent.
"As predicted, the greatest number of first-half all-sector property transactions closed in Selangor, Perak, and Johor. Selangor alone accounts for 36,026 transactions in the first half, which is about one-fifth of the total. Transaction value in the first half was significantly higher than the pre-pandemic level, which remained relatively steady in 2018 and 2019," he said.
Irhamy thinks that by 2023, corporate initiatives to diversify their global supply chains will pay off for Malaysia.
"After the disruption of the pandemic, companies want redundant and diversified supply chains. Very often that means locating facilities in ASEAN, especially in Malaysia. Just look at Apple, whose manufacturing supply chain is one of the world's largest and has long been concentrated in China. However, the Covid response in China has caused production delays, and Apple is looking for greater supply chain security.
"Twenty Apple suppliers are now located in Malaysia, which already gives us an important role in the supply chain. Malaysia has significantly more Apple suppliers than 18 in Thailand, 16 in the Philippines, 11 in India, and two in Indonesia. I believe Malaysian suppliers will account for a larger share of Apple's supply chain by 2025 than today," he said.
Irhamy said judging by the enquiries his firm is receiving, the corporate sector in Malaysia is still planning for a busy 2023.
The basics of growth
According to Irhamy, the stability brought about by the selection of Malaysia's 10th Prime Minister will benefit the market for commercial and industrial real estate in 2023.
He claimed that recent political unrest may have led investors to postpone important purchases.
But now that Malaysia has a new prime minister, he said his company anticipates additional deals.
According to him, investors are feeling more optimistic now, and the real estate market will do well in 2023.
"I understand those who were worried about the impact the uncertain 15th General Election (GE15) results might have had, but the economy goes into 2023 in a strong position. That's despite unsettling events such as the war in Europe and the continued isolation of China, which is by far our largest regional economy," he said.
Malaysia's economy is expected to grow moderately between four and five per cent in 2023. That compares to the anticipated 6.5 per cent to 7 per cent growth in 2022, according to the Finance Ministry.
Economic performance in 2023 is likely to be backed by strong fundamentals and the country's diversified economic structure.
"The ongoing policy support will cushion the impact of the rising cost of living and mitigate the downside risks stemming from prolonged geopolitical uncertainties and tightening global financial conditions," Irhamy said.