KUALA LUMPUR: The industrial sector will continue to perform well this year, driven by increased warehousing activities supported by the e-commerce wave, said Rahim & Co International Sdn Bhd director of estate agency Robert Ang.
“Generally the industrial sector has always been the best performer in terms of yields. If you look at the various sectors, for residential in prime areas, yields have gone down to 3-4%. That’s what we call yield compression over the years.
“If you look at commercial, which is office and retail, you’re looking at 5-6%. Industrial has always been giving the highest yield, you could get as high as 6-7%,” he told reporters at a briefing on the Malaysian property market today.
He said as a manufacturing nation, Malaysia’s gross domestic product has been driven by the manufacturing sector but, lately, this has been on a decline and the slack has been picked up by logistics and warehousing.
“Malaysia has become a regional centre for a lot of MNCs so there’s a lot more activities in the industrial sector at the moment. But we are a country blessed with a lot of good infrastructure. Because of that, a lot of land are available now for such activity. There are several major players coming into the market,” he added.
Ang said with such players coming into logistics, including foreign players like Mapletree and Mitsui, Malaysia could face oversupply of space and facilities in the segment in the coming years.
In terms of hotspots for industrial properties, Ang said the traditional areas would be Shah Alam, which is serviced by a good highway network, and those that are closer to ports while current hotspots include KLIA and Banting, which is serviced by the West Coast Expressway.
Rahim & Co director of research Sulaiman Akhmady Mohd Saheh said the Digital Free Trade Zone, although it has not kicked off in a big way yet, has a lot of potential especially due to its proximity to KLIA. “KLIA’s masterplan for its repositioning exercise is going to give positive impact to the logistics market.”
Executive chairman Tan Sri Abdul Rahim Abdul Rahman (pix) said the property market will remain flat across the board this year, except for warehousing, which has been giving steady returns of 6-7%.
