By Sharen Kaur/NST Property - January 7, 2025
KUALA LUMPUR: Malaysia's real estate market experienced significant growth in 2024, particularly in transactions involving land, industrial, and commercial assets, and the positive momentum is expected to carry into 2025, according to Datuk Sr. Paul Khong, Group Managing Director of Savills Malaysia.
The momentum from 2024 has set the stage for another strong year in 2025, as the industry continues to thrive, Khong said.
"I predict that 2025 will be another great year for industry to thrive. It is well-fuelled by major geopolitical shifts and changes in all global supply chains. The COVID-19 pandemic made companies focus on resilient operations. The continuous and contagious US-China trade war has led to diversifications and pushed demand for more logistics and manufacturing facilities," he said.
Khong highlighted Malaysia's strategic location and competitiveness as key factors enabling the country to capitalise on these trends.
"Our records show RM13.9 billion in major transactions in the first nine months of 2024 (9M/2024), doubling from RM7.29 billion in 9M/2023. Land consists of about 64 percent of the total transaction value, followed by retail properties (23.9 per cent) and industrial properties (4.92 per cent)," he said.
On the global front, Khong said that the inauguration of the next US president is expected to bring geopolitical headwinds, particularly focused on China.
Domestically, Malaysia's economic outlook for 2025 remains robust, albeit with some anticipated structural adjustments.
Strategic investments and strong industrial foundations are projected to drive economic inclusivity and sustainability, supporting continued growth in the property sector.
Khong observed that key sectors such as manufacturing, services, and tourism have not only recovered but surpassed pre-pandemic levels, driven by increased consumer spending and favourable market conditions.
He also noted a rise in foreign direct investments, with Malaysia attracting RM255 billion in approved investments across 4,753 projects in services, manufacturing, and primary sectors, representing a 10.6 per cent increase from RM230 billion in 9M/2023.
Office Market Trends
Khong anticipates the office sector will remain tenant-driven in 2025 due to persistent high vacancy rates.
Global uncertainties and the beginning of Trump's presidency will likely sustain demand for rightsizing and relocation activities, he said.
Key trends include a "flight to quality," where tenants favour Grade A buildings with modern amenities, energy efficiency, and access to public transit.
Flexible and coworking spaces are also expected to grow, supported by hybrid work models and a focus on employee well-being.
Zawani Abidin, head of Worldwide Occupier Services, reported that high-grade office buildings in Kuala Lumpur City are seeing occupancy rates rebound, with some surpassing pre-pandemic levels.
The return to the office is real but focused on the right office—one that aligns with modern size and specifications, he said.
Zawani emphasised that companies increasingly seek smart, user-focused office spaces.
Ageing buildings that cannot be upgraded, especially those in less competitive locations, are likely to fall out of favour.
"More companies expect their offices to be smart and user-focused. There is no reprieve for ageing buildings that cannot be upgraded, particularly in locations that are losing out to the brighter gems within the city," he said.
Source: https://www.nst.com.my/property/2025/01/1157643/khong-malaysias-real-estate-market-poised-sustain-positive-momentum-through
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