Industrial sector seen to be ‘promising’: Knight Frank

PETALING JAYA: The outlook for Malaysia’s industrial sector remains positive moving into 2020, supported by various initiatives announced in Budget 2020, according to a report by Knight Frank Malaysia.

In its “ Real Estate Highlights 2 nd Half of 2019” research report, the property consultancy group said it foresees the industrial sector to be the forerunner of the country, particularly in the states of Selangor, Penang and Johor which are the primary destinations for investment.

““We foresee Selangor and Johor garnering more interest from manufacturers and investors alike. Industrial players have a preference for the Shah Alam – Bukit Jelutong locale due to its strategic positioning with good accessibility and connectivity.

“However, due to scarcity of sizeable land and high land cost, we observed an overspill to other areas. The on-going West Coast Expressway (WCE) with an interchange at Banting to be completed by early 2021 has opened up new opportunities for the locality, attracting the attention of major logistics and industrial players,” said Knight Frank Malaysia capital markets executive director Allan Sim (pix).

Growth in the manufacturing sector is expected to regain momentum moving into 2020 after slowing to 3.6% in 3Q2019 against 4.3% in 2Q2019.

Sim also said Malaysia’s readiness as a regional logistics hub is materialising with impactful on-going projects and initiatives such as the Digital Free Trade Zone (DFTZ), the regional e-commerce and logistics hub at KLIA Aeropolis, the East Coast Rail Link (ECRL) and the WCE.

“Underpinned by increasing global e-commerce trade and consumer spending, logistics services are poised for growth and this will translate to higher demand for logistics and warehousing space,” he said.

In Penang, Knight Frank Penang resident director Tay Tam said in the first nine months of 2019, the state garnered RM13.2 billion in total approved manufacturing investments from 113 projects, surpassing the RM5.78 billion achieved for the entire year in 2018.

“This is a tremendous boost to the state and augurs well for the short and medium-term growth of the sector.

“The outlook for 2020 is very positive. In tandem with robust performance of the manufacturing sector and the e-commerce platform, demand for logistics and warehousing facilities is set to grow in the coming year too,” added Tam.

Meanwhile in Johor Bahru, according to Iskandar Regional Development Authority, the manufacturing sector was leading the numbers among the sectors and contributed 24% to the total cumulative investment for the region as of June 2019.

Knight Frank Johor branch head Debbie Choy said there were significant industrial transactions in the Port of Tanjung Pelepas and Nusajaya Tech Park, due to their established facilities and infrastructure.

“The outlook for the industrial market is one of optimism with 2019 witnessing the listings of two Johorbased industrial players, namely AME Elite Consortium and Spring Art Holdings Sdn Bhd, in Bursa Malaysia. This is a positive sign that industrial players in the state have potential to grow further in future.,” she said.