18MPS: Industrial demand outpaces supply in JS-SEZ—Knight Frank

KUALA LUMPUR (Jan 30): Developers are not building enough industrial projects in the Johor–Singapore Special Economic Zone (JS-SEZ), with supply still lagging behind growing demand.

Knight Frank Malaysia Sdn Bhd senior executive director Allan Sim said developers are not keeping up with industrial demand in the SEZ.

“There are not really many industrial developments yet. Demand is more than supply at the moment,” he told EdgeProp at the 18th Malaysian Property Summit (18MPS) held here on Thursday.

Allan further stressed that manufacturing fundamentals depend on robust infrastructure.

“Power must be sufficient, water must be reliable, roads must be in good condition, and ports must be well managed. Hopefully, more well-planned industrial parks and industrial developments will be seen in Johor,” he said.

He added that Malaysia’s role as a strategic industrial hub is growing, driven by global supply chain demands and regional strategies like “China plus one”, “Singapore plus one”, and soon “Europe plus one”.

“Logistics players are expanding into semi-automated and tailor-built buildings to meet evolving operations. Older factories are no longer suitable for new tenants.

“Port access is critical, transportation costs, production costs, and proximity determine the viability of industrial investment,” Allan highlighted.

Customise solutions to draw investors

Singapore-based logistics consultancy Northmod Pte Ltd investment director Jon Sim said SEZ status alone is not enough, because investors focus on the specific tenants, and their operational requirements.

“There is a checklist that investors usually follow, though it’s not always perfect. Firstly, the asset’s location and access to critical infrastructure like ports is essential,” he said during the session on “SEZs and Industrial Real Estate: Unlocking Malaysia’s Next Growth Frontier”.

Jon also stressed the importance of support from the master developer.

“Having a competent port operator and a master developer able to provide additional power, water, or road infrastructure prevents being stuck with a project.

“Ultimately, decisions follow where customers want to be. The approach is meticulous: understanding specific requirements, and tailoring solutions accordingly,” he said.

Jon also explained that the global supply chain has distinct logistics and manufacturing elements, which grow differently in various clusters.

“A clear example is Penang, across Batu Kawan. Every three to six months, a new building appears, reflecting new manufacturing demand.

“Manufacturing demand staggers over time, so projects are built in phases. Within 15 months, one phase is usually operational. Once operations mature, the supply chain takes over,” he added.

The 18MPS, organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS), brought together 300 industry players nationwide to unpack the outlook for Malaysia’s property market in 2026, with discussions spanning five key sessions including a panel discussion on how evolving investment trends, alternative assets, and adaptive reuse are reshaping the sector for investors, developers and policymakers.

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