KUALA LUMPUR: Knight Frank Malaysia said major data centre investments in the Klang Valley has seen demand for high-quality, sustainable logistics spaces grow and help push up rent slightly.
The Real Estate Highlights 1st Half of 2024 (REH) report features insights into the performance of the property markets across Klang Valley, Penang, Johor, Sabah and Sarawak.
According to the report, Malaysia's industrial property market is witnessing robust demand, particularly for high-quality sustainable developments.
Major investments in data centres, notably by Google in Klang Valley, underscore the sector's growth.
The manufacturing sector is projected to grow by 3.5 per cent in 2024, supported by the recovery of export-oriented industries and sustained growth in domestic clusters.
It said the region has attracted significant data centre investments, including major projects like Google's data centers.
Knight Frank Malaysia said the property market continues to show promising growth prospects, bolstered by strategic investments, infrastructure improvements, and evolving market dynamics.
Its group managing director Keith Ooi said this indicates a strengthening investment climate, driven by strategic government initiatives and a supportive regulatory environment.
"Knight Frank Malaysia's mid-year review highlights a promising trajectory for the property sector, supported by robust economic growth, significant investments, and adaptive market trends," he said in a statement today.
In terms of the office market, the report said there is growing demand for co-working and flexible office spaces, reflecting changing work patterns and preferences.
The office market continues to draw multinational corporations, buoyed by competitive rental rates, a skilled workforce, and robust government support for the digital economy.
The retail sector trends indicate a surge in digital integration and experiential offerings, with retailers adapting to changing consumer preferences and enhancing in-store technologies to boost engagement and sales.
On hospitality sector, the report said the luxury hotel segment is set for significant growth, with new developments dominated by international brands.
It noted that the average occupancy rates (AOR) and average daily rates (ADR) indicate a robust recovery in the hospitality sector.
Meanwhile, for the high-end high rise residential market, Kuala Lumpur showed strong activity, with a 19 per cent increase in transacted volume and value. The report stated that developer initiatives to promote homeownership through various campaigns and bank collaborations are enhancing the homebuying experience.
Overall, Knight Frank said the findings from the report underscore the strategic importance of the industrial sector in the country's economic landscape.
It added that key infrastructure projects such as the East Coast Rail Line (ECRL), Johor Bahru – Singapore Rapid Transit System (RTS), Pan Borneo Sabah, and MyDigital 5G are expected to further enhance connectivity and support the sector's growth.