Malaysia Commercial Real Estate Market Size

Malaysia Commercial Real Estate Market Analysis

The Malaysia Commercial Real Estate Market size is estimated at USD 8.88 billion in 2024, and is expected to reach USD 12.83 billion by 2029, growing at a CAGR of 7.65% during the forecast period (2024-2029).

• As per industry experts, in the first half of 2022 (H1 22), across property market performance in the Klang Valley, Penang, Johor Baru, Johor, and Kota Kinabalu in Sabah, the industrial real estate sector continued to grow in comparison to the retail industry. The industrial sector has consistently grown over the past few years due to rising e-commerce penetration rates. The rise in long-distance shipping increased the need for warehouse space and a structural change toward omnichannel retailing. There is strong interest in selling or buying existing commercial assets (land or buildings) in Sabah, Johor, and Klang Valley, whether taking advantage of bargains for high-quality assets or implementing a portfolio rationalization exercise. The Logistics and Industrial sub-sectors remain the real estate industry's new darlings. As people exit pandemic management after two years, there is a clear interest in the Healthcare sub-sector becoming an alternative investment to watch.
• According to Industry experts, the real estate market in Malaysia is slowly improving as buyers are still dealing with the repercussions of COVID-19. According to the company's most recent research on the Malaysian real estate market, the Landed Property Sale Price Index increased by 1.1% quarter over quarter and 3.64% year over year in the second quarter (Q2) of 2022. It is accompanied by a 5.21% increase but a QoQ decline of 1.96% in the Landed Property Sale Demand Index. Even though potential purchasers are discouraged by affordability and financial instability challenges, the group claimed that the pattern showed that landed properties are still the preferred purchasing option. It led to slower demand for homes.
• Year-on-year (y-o-y), Malaysia's volume of property transactions registered a 1.78% marginal drop in the first nine months of 2021 to clock in at 201,068 transactions. However, the transaction value rebounded nearly 14% to almost MYR 98 billion (USD 22.10 billion) or up to about MYR 11.2 billion (USD 2.53 billion) in 2020. Investments into the Office, Retail, Hotel / Leisure, Industrial, and Logistics sub-sectors will increase in 2022-23. Developers have increased their investment across the board in all sub-sectors, indicating increased activity in 2022-23 over the previous two years. Managers of mutual funds and real estate investment trusts have increased their exposure to industrial and hospitality assets, with a roughly equal distribution in the other sub-sectors. Lenders have reduced their exposure in almost all sub-sectors except the Office sub-sector.