Knight Frank: Real estate records RM78.2b investment in 2025 amid 86.7% surge in private equity

KUALA LUMPUR (June 9): Malaysia registered a record RM426.7 billion in approved investments in 2025, with the real estate sector alone accounting for RM78.2 billion, according to Knight Frank.

In a press statement issued by the real estate consultancy firm, the investment performance was supported by an 86.7% year-on-year growth in private equity and venture capital investments.

Meanwhile, on a global scale, private capital, including ultra-high-net-worth individual (UHNWI) investors and family offices, continued to dominate the global commercial real estate market, investing US$464 billion (RM1.8 trillion) in 2025 and outpacing institutional investors for the fourth consecutive year.

This global deployment included US$139.1 billion in cross-border commercial real estate investments across 10 key markets, including the UK, US and Germany.

“Global CRE (commercial real estate) was clearly entering a new phase of the cycle where repricing, supply and demand fundamentals, stabilising interest rates and improving visibility on income was bringing capital back into the market. Recent global events have undoubtedly created uncertainty, but the trajectory driven by the fundamentals will resume,” said Knight Frank global head of capital markets Nick Braybrook in the statement.

In Malaysia, private capital and family offices are emerging as major growth catalysts for commercial real estate, which included a number of significant family office transactions in 2025.

These domestic transactions were further catalysed by the introduction of the single family office framework in Johor’s Forest City Special Financial Zone.

Knight Frank Malaysia group managing director Keith Ooi commented that Malaysia’s CRE sector saw a number of high-profile private capital deals in 2025, including the RM1.1 billion acquisition of a major stake in the prestigious The Exchange TRX development by a family office.

“In addition, the Forest City SFO (single family office) framework is a clear indicator of the government’s emphasis on single family offices as an investment vehicle for domestic and international high-net-worth families, with the programme securing nine family offices managing a combined US$169 million of assets as of end-2025, with a target of RM2 billion by end-2026,” Ooi noted.

Knight Frank also highlighted that the growing dominance of private capital in the real estate sector is attributed to its advantages in terms of faster decision-making, access to diverse capital streams, and higher tolerance of risk relative to institutional investors.

“We are seeing a significant rise in emerging market wealth. The number of family offices worldwide is projected to reach 10,000 this year, with an annual growth rate of 5%, while Malaysia’s UHNWI population is set to grow to 1,881 individuals by 2031. This, coupled with the ongoing tendency for regional banks to downplay CRE exposure, is driving private capital dominance in the space,” said Knight Frank Malaysia executive director of capital markets — investments James Buckley.

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