Malaysia Real Estate Market Size - Industry Report On Share, Growth Trends & Forecasts Analysis (2025 - 2030)

Malaysia Real Estate Market Analysis

The Malaysia Real Estate Market size is estimated at USD 39.20 billion in 2025, and is expected to reach USD 54.06 billion by 2030, at a CAGR of 6.64% during the forecast period (2025-2030).

Malaysia's real estate market landscape is experiencing significant transformation driven by technological advancement and changing consumer preferences. The industrial sector has shown remarkable resilience, with the Industrial Production Index maintaining strong performance at 114.1 points, supported by robust growth in the manufacturing and electrical sectors. The manufacturing index demonstrated impressive growth, increasing by 9.6% year-on-year, while the mining and power indices showed modest gains of 2.3% and 1.6%, respectively. This industrial momentum has catalyzed substantial investments in modern warehousing and logistics facilities, particularly in strategic locations focused on enhancing last-mile delivery capabilities.

The retail sector is undergoing substantial evolution with the integration of digital technologies and innovative retail concepts. The total supply of retail space in the Klang Valley reached 64.86 million square feet in H2 2021, with several major developments, including The Exchange Mall and Mitsui Shopping Park LaLaport KL, entering the market. Property developers are increasingly focusing on creating mixed-use developments that combine retail, office, and residential components to maximize value and meet evolving consumer demands. These developments are characterized by enhanced amenities, sustainable features, and technology-enabled services to attract both tenants and customers.

The office sector is witnessing a significant shift towards sustainable and tech-enabled workspace solutions. Prime office rents in WP Kuala Lumpur have maintained stability at MYR 8.50 per square foot per month, reflecting the market's resilience despite changing work patterns. The emergence of new office developments is increasingly focused on incorporating wellness features, environmental sustainability, and flexible workspace solutions to meet evolving corporate requirements. Property developers are adapting their offerings to include more collaborative spaces, advanced technological infrastructure, and environmental certifications to attract and retain quality tenants.

The industrial and logistics sector is experiencing unprecedented growth driven by e-commerce expansion and supply chain modernization. Major developments include Bridge Data Centres' new facility in Johor and Tiong Nam Logistics Holdings' MYR 200 million warehouse development at Senai Airport City. Tropicana Corp's launch of its first industrial park in Iskandar Malaysia, spanning 1,188 acres, represents a significant addition to the industrial real estate sector. These developments are characterized by advanced specifications, strategic locations, and sustainable features, catering to the growing demand for modern industrial and logistics facilities.

Malaysia Real Estate Market Trends

Strong Industrial Production and Manufacturing Growth

Malaysia's industrial sector has demonstrated remarkable resilience, with the Industrial Production Index (IPI) consistently maintaining levels above the 100-point threshold, reaching 114.1 points in Q3 2021. This robust performance has been primarily driven by substantial growth in the industrial and electrical sectors, creating increased demand for growth in real estate and industrial real estate assets. The manufacturing index's impressive rise to 124.8 points, coupled with the mining and power indices growth of 2.3% and 1.6% respectively, has created a strong foundation for industrial property development and investment.

The Purchasing Manager's Index (PMI) improvement to 52.2 points reflects strengthening business conditions in the manufacturing sector, indicating a healthy outlook for industrial trends in property and real estate demand. This growth has particularly benefited key industrial districts such as Petaling and Klang, which together account for nearly 47% of market activity. The strategic importance of these locations, combined with their established infrastructure and accessibility, continues to attract both domestic and international industrial investors and operators.

E-commerce and Digital Transformation

The rapid acceleration of digital transformation and e-commerce has fundamentally altered the industrial trends in the real estate market in Malaysia. The surge in demand spans across multiple sectors, including food, fast-moving consumer goods, and health and pharmaceuticals, driving the need for strategically located warehousing and logistics facilities. This transformation has particularly benefited industrial parks and premises such as Hap Seng Business Park, Sunway Subang Business Park, and Welloyd Industrial Park, which have been developed to meet the growing demand for modern logistics infrastructure.

The evolution of last-mile delivery requirements has sparked significant development in industrial real estate, with new projects such as Bandar Bukit Raja (Phase 2), Compass @ Kota Seri Langat, and Eco Business Park V being developed to meet these specific needs. The industrial sector has also witnessed increased interest from data center operators, with major projects such as GDS Holdings Limited's hyperscale data center campus in Nusajaya Tech Park, which will offer approximately 242,188 square feet of net floor space, and Bridge Data Centres' new facility in Johor's KIDEX, demonstrating the sector's diversification beyond traditional manufacturing and warehousing uses. This diversification is a key aspect of the forecast for real estate over the next 5 years, indicating potential for continued rate of property growth in Malaysia.

Segment Analysis: By Property Type

Residential Segment in Malaysia Real Estate Market

The residential segment continues to dominate the real estate market in Malaysia, accounting for approximately 61% of the total real estate market size in 2024. This significant market share is driven by strong demand for affordable housing, particularly in properties priced below MYR 300,000, where there remains a substantial gap between demand (48%) and supply (28%). Terrace houses remain the most sought-after property type, being the predominant choice for both first-home buyers and investors. The segment's strength is further reinforced by growing demand among millennials, who have shown an increasing preference for double-storey terraces over condominiums. The government's continued focus on promoting affordable home development and initiatives like the Guaranteed Credit Housing Scheme, which provides MYR 2 billion in guarantees to banks, has helped sustain the segment's market leadership.

Hospitality Segment in Malaysia Real Estate Market

The hospitality segment is emerging as the fastest-growing sector in the Malaysia property industry, projected to grow at approximately 10% during 2024-2029. This robust growth is driven by several factors, including the resumption of international travel through vaccinated travel lanes with neighboring countries like Singapore, Thailand, and Indonesia. Hotels are adapting to changing consumer preferences by incorporating wellness centers, fitness facilities, and redesigned open spaces. The segment is also witnessing significant digital transformation in booking processes and operational efficiency. Properties that focus on specific age groups and collaborate with local tour operators for niche tourism, such as marine tourism, ecotourism, and wellness-themed trips, are expected to drive growth in this segment.

Remaining Segments in Malaysia Real Estate Market

The office, retail, and industrial segments continue to play vital roles in shaping the Malaysian property market overview. The office segment is experiencing transformation with the integration of lifestyle components and an increased focus on health and wellness features, while also adapting to hybrid work arrangements. The retail segment is evolving with the integration of digital platforms and enhanced shopping experiences, with new malls incorporating innovative features to attract customers. The industrial segment is benefiting from the rise of e-commerce and logistics, particularly in strategic locations around Klang Valley and Selangor, with increasing demand for warehousing and distribution facilities.