KUALA LUMPUR, July 17 — The Anwar government’s push to spur the local digital economy has fuelled a rush for industrial properties by investors eager to cash in on the expected e-commerce boom, Knight Frank Malaysia said today as it released this year’s first half market review.

Institutional investors like Permodalan Nasional Berhad and civil service pension fund KWAP are among large funds that have poured money into projects to build factories and warehouses in high-tech industrial parks, the consultancy noted, citing it as a significant trend that underscores the digital economy’s growth prospects.

“There is increasing interest from institutional investors and funds in the industrial sector, suggesting a growing appetite for assets that cater to the rise of the digital economy, as well as ongoing need for manufacturing and logistics space,” it said.

“Yield-accretive industrial assets are in demand as investors seek to capitalise on stable returns from this sector.”

As a result, rentals have gone up although just slightly. Asking rents and prices remained stable in the first half of 2024 compared to the second half of 2023, according to the firm’s survey. It expects rental rates of prime industrial space in Klang Valley to remain resilient throughout the year.

Approved manufacturing investment in Klang Valley surged by 244 per cent in the first quarter of 2024, fuelled by robust foreign investment which accounted for 61.5 per cent of the total.

Five new major high-tech industrial parks within the Valley are on schedule to begin running by this year. Among the most notable is the Metro Hub 1 & 2, E-Metro Logistics Park, developed by Sime Darby Property.

SDP, a subsidiary of Sime Darby, a government-linked company, said the E-Metro Logistics Park is a 177-acre industrial development designed with long-term sustainability in mind. The integrated logistics park has approximately 8 million sq ft of space, catering to the growing demand for quality industrial and logistics facilities.

Knight Frank said the trend towards sustainable industrial parks is expected to shape the future development of logistics space in Klang Valley.

“With higher development costs associated with prime logistics space, market rents are anticipated to experience a marginal increase in the short term,” it said.

https://www.malaymail.com/news/malaysia/2024/07/17/knight-frank-anwar-governments-digital-economy-push-sparks-rush-for-industrial-properties/144027