KUALA LUMPUR: Rising foreign direct investments (FDIs) and domestic direct investments (DDIs), particularly by large multinationals in data centres and chip design and manufacturing, will drive growth in the industrial subsector this year.
"The better trade performance recorded by the country in 2024 could ultimately contribute to a higher demand for industrial space as manufacturers expand capacity. Moreover, the country has succeeded in attracting a higher level of committed FDIs and DDIs in 2024.
"The higher level of committed investments secured, including from several large and well-known multinationals like AWS, Google, Microsoft, Amazon and Alibaba, will benefit and provide a boost to the industrial property sub-sector, and this could translate into increased demand for business and industrial space," said Henry Butcher Malaysia chief operating officer Tang Chee Meng.
The volume of industrial transactions in Malaysia increased 6.5 per cent in the first nine months of 2024 compared to the same period a year ago, while the value of the transactions rose 22.8 per cent.
Selangor continued to dominate the market, contributing the most to the national transaction volume (33 percent), followed by Johor (18.5 per cent). Terraced factories contributed the highest to the total volume of transactions, followed by vacant plots.
Additionally, Tang said the government's 30-day visa-free programme for travellers from several countries is expected to boost the retail, leisure, and residential subsectors.
The weaker ringgit since the third quarter of 2023 will encourage international tourists to spend more during their trips in Malaysia.
"At the same time, the higher cost of airfares as well as the weak ringgit will encourage more Malaysians to spend their holidays within the country instead of travelling abroad," he said, adding that Retail Group Malaysia has forecast a four per cent growth rate for the Malaysian retail industry in 2025.
Commenting on the stamp duty increase to a flat four per cent for foreign individuals and companies in 2024, Tang said the impact is likely to be minimal, as Malaysian real estate prices remain significantly more affordable than in other countries in the region.
He also said global challenges, including the ongoing war in Ukraine, escalating conflict in Gaza and China's sluggish economic recovery, have created uncertainties for economic growth and Malaysia's property market.
However, Malaysia's more stable political environment, sustained economic growth and an anticipated tourism boost from Visit Malaysia Year 2026 (VMY 2026) are expected to cushion the impact of these global headwinds.
With gross domestic product (GDP) growth projected by the government at 4.5 per cent to 5.5 per cent in 2025, and barring any adverse global events, Tang said the company is confident that Malaysia's resilient property market will continue to experience positive growth in 2025.
"This year, we are optimistic that the residential, commercial, industrial, retail, and hospitality subsectors of the real estate market will remain stable and continue to grow positively," Tang said.