• Knight Frank Malaysia executive director of land and industrial solutions Allan Sim said the growth is attributed to tight availability of grade A warehouses and strong leasing demand for specific grade A warehouses.

KUALA LUMPUR (Feb 15): Leasing activity for prime logistics warehouses particularly for the Klang Valley, Johor Bahru and Penang remained resilient, with expected rental growth in 2024, despite external headwinds and challenges.

In a statement today, Knight Frank Malaysia executive director of land and industrial solutions Allan Sim (pictured) said the growth is attributed to tight availability of grade A warehouses and strong leasing demand for specific grade A warehouses.

“This year could see rental growth due to price resistance from landlords due to higher construction and financing costs.

“As we witness a measured increase in rents, our emphasis remains on fostering innovation and sustainability in logistics spaces to meet the evolving demands of occupiers,” he said, adding that Kuala Lumpur is holding steady, showcasing stability in the face of global economic fluctuations.

Sim said the local market’s response to these changes underscores the adaptability and forward-thinking nature of Malaysia’s logistics industry.

The expected global recovery in the semi-conductor industry this year will increase the demand for the space particularly in Penang, Kulim, Melaka and Selangor, he said.

“There are more higher-end grade A warehouses scheduled to be completed in 2024 and landlords are increasingly reluctant to compromise on building specification for a lower rental rates.

“We shall also see more landlords undertake redevelopment on older factories/warehouses to modern and higher-specification warehouses,” he added.

Sim, however, said the performance of rental will be subject to the performance of foreign direct investment and domestic direct investment in 2024.

“As we navigate the path ahead, the outlook for logistics in Malaysia remains optimistic, bolstered by our resilience and strategic positioning in the Asia-Pacific landscape,” he said.

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