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Industrial sector continues to be the bright spot for 2021 - CBRE | WTW

PETALING JAYA (Jan 25): Despite the many challenges faced by the property market in Malaysia arising from factors such as the pandemic and political uncertainty in the nation, the industrial sector will continue to shine in local property market  with regional logistics and warehousing being one of the primary prospects in the long-term, said CBRE I WTW managing director Foo Gee Jen.

“Overall, our take Is that the [property] market will not be performing any better than what we have seen in 2020 but apart from industrial and healthcare, we hope to see more foreign direct investments coming into the sector this period,” said Foo during the virtual launch of the CBRE I WTW Real Estate Market Outlook Report 2021 today.

He said that the emergence demand for Personal Protective Equipment (PPE) and the booming e-commerce activities has generated investment totalling about RM37 billion since the start of the pandemic.

“The key thing for warehousing is the connectivity. The places nearer to the highways, airports and ports are the key locations for the logistics [sector to thrive]. In regards to location, it has to be in the suburban area where the e-commerce consumers are located such as the Ulu Klang area and the edge of Nilai, where it is convenient to deliver products to the consumers,” Foo explained.

According to the report, the industrial sector gained traction on the rapid usage of e-commerce, leading to more than RM100 billion worth of investments in 2020 and an improved logistics sector and warehouse demand.

Global technology giant Microsoft has a data centre under construction in Kulai , bringing expectations of more investments into the locality by Microsoft linked network companies, while the oil and gas industry is expected to improve in Miri following news of Shell relocating its Malaysia HQ operations there.

Meanwhile, Foo also added that healthcare is a new focus sector in view of the current situation and rising awareness on quality and healthy living.

“However, we need to study the determinants of feasibility: regulations and guidelines, sourcing of operators, supply and demand gap in terms of affordability and types of services provided. 

Another niche sector which has entered the scene in recent years amidst digitalization are data centres as the Industrial Revolution 4.0 and e-commerce are the main contributors to the demand of data centres,” said Foo.

One of the notable deals is the 745-acres Kulai Data Exchange (KIDEX) in Johor which is set to be the second data hub in Malaysia after Cyberjaya. Upon full operation in 2023, KIDEX is anticipated to generate RM17.5 billion in investment value and create 1,600 job opportunities.

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