Malaysia records 2,560 industrial units under construction
Another 1,702 units are in the planning stage.
According to Knight Frank, as of 3Q2022, the cumulative industrial property inventory in Klang Valley stood at 46,762 units, concentrated in District of Petaling and District of Klang with 14,413 units (30.8% share) and 8,760 units (18.7% share), respectively.
In the pipeline, there are 1,560 industrial units currently under-construction (incoming supply) with another 1,702 units in the planning pipeline.
Here’s more from Knight Frank:
District of Petaling and District of Klang also topped in terms of incoming supply with 498 units (31.9%) and 413 units (26.5%) respectively. The bulk of incoming detached units will come from District of Klang while for the semi-detached category, they are focused in Klang, Gombak and Kuala Selangor districts.
As for planned supply, it is worthy to mention that about half (48.9% share or 833 units) will be from the District of Klang. This is likely attributed to its proximity to Port Klang – the country’s largest port and the world’s 12th busiest port (2021); the availability of large tracts of development / industrial land at competitive pricing, good and improving road infrastructure with the under construction 233-kilometre West Coast Expressway (WCE) expected to be fully completed and operational by 2024; and other factors.
Amid the oversupplied market in selected property sub-sectors, the country’s real estate investment trusts (REITs) are diversifying or expanding their portfolio into the flourishing industrial segment.
In September, Axis REIT announced that it is acquiring an industrial facility located in Kapar, Klang for RM41 million while earlier in July, KIP REIT made its maiden industrial asset acquisition comprising three industrial properties in Pulau Indah Industrial Park, Port Klang for circa RM79 million.
Sunway REIT acquired a prime industrial asset comprising two buildings with total gross floor area (GFA) of circa 497,487 sq ft in Sungei Way, Petaling Jaya for RM60 million in late June. The newly listed AME REIT, which has its stronghold in Johor with 37 industrial properties (including workers’ dormitories), is also eyeing expansion to the central and northern regions of Peninsular Malaysia.
The logistics sector is emerging as a strategic investment opportunity – logistics facilities are highly favoured as investment assets amid rising e-commerce growth and scarce supply. There were several notable logistics related announcements during the review period.
The Employees Provident Fund (EPF) and Ally Logistic Property Co Ltd (ALP) have entered into a shareholders agreement (70:30 basis) to develop a 100% pre-leased logistics hub in Bukit Raja, Klang. Located on 27 acres of freehold land, the hub will have a GFA of more than 1.8 million sq ft and 100,000 pallet positions in the Automated Storage and Retrieval System (ASRS) zone. It is slated for completion by the third quarter of 2024.