Recent land acquisitions in Malaysia’s industrial property sector signal an uptick in demand as businesses seek to capitalize on the country’s evolving economic landscape. Companies across various sectors have been announcing substantial land deals, driven by the growing need for industrial space in light of the country’s rapid transformation into an advanced industrial economy.
In one notable transaction, Eco World Development Group Bhd (EcoWorld Malaysia) revealed last month that Microsoft Payments (M) Sdn Bhd had acquired 138.532 acres of freehold industrial land at Eco Business Park I in Iskandar Malaysia, for RM693.96 million. Additionally, EcoWorld secured a deal with Pearl Computing Malaysia Sdn Bhd for the sale of land at Eco Business Park V in Selangor, intended for the development of a data center, valued at RM266.14 million.
In another key development, Hektar Real Estate Investment Trust (Hektar-REIT) purchased a light-industrial property in Penang’s Bayan Lepas Free Industrial Zone for RM30 million from Microlead Precision Technology Sdn Bhd. Similarly, Ann Joo Resources Bhd acquired the remaining 45% stake in Konsortia Etiqa Sdn Bhd, which holds 437 acres of industrial land in Kedah, for RM96 million.
Industry experts see these transactions as part of a broader trend, with increasing confidence in the industrial property market. Samuel Tan, CEO of Olive Tree Property Consultants, attributed this growing demand to several factors. “Malaysia is evolving into an advanced industrial economy, supported by government initiatives such as the National Energy Transition Roadmap and the Industry4Wrd policy,” he told StarBiz. “These proactive policies create a business-friendly environment, attracting both domestic and international investors.”
Tan further noted that Malaysia’s infrastructure upgrades—ranging from highways to ports—are positioned to meet increasing demand. “The industrial sector offers attractive yields, making it a favorable asset class for real estate investment trusts (REITs),” he added.
As the industry shifts toward digitalization, artificial intelligence, and automation, Tan emphasized the importance of sustainability, innovation, and upskilling within the sector. “Environmental, social, and governance (ESG) principles will be key to its future development,” he said.
Analysts are also optimistic about EcoWorld’s recent data-center-related land sales. CGS International Research highlighted that EcoWorld has monetized land sales to data center operators, totaling RM1.6 billion over the past year. The research firm expects these transactions to impact earnings starting in the 2026 financial year.
MIDF Research viewed EcoWorld’s deal positively, noting that it would enhance the company’s recurring income while improving its balance sheet by reducing gearing. “Post-sale, net gearing is expected to decline from 0.19 to 0.13 times,” the firm stated.
Meanwhile, Hektar-REIT’s recent industrial acquisition in Penang was also met with favorable reactions. Hong Leong Investment Bank Research indicated that the purchase would yield a 7.5% return, higher than Hektar-REIT’s projected net property income yield of 5.5% to 6% for FY25-FY26. “This acquisition fits well with Hektar-REIT’s strategy of diversifying its portfolio,” the firm noted.
In Johor, the Johor-Singapore Special Economic Zone (JS-SEZ) is expected to drive significant demand for industrial properties. TA Research forecasts that the enhanced infrastructure and cross-border connectivity will make Johor a hotspot for industrial and residential development. The research firm identified developers with strong track records in integrated townships as prime beneficiaries of this growth.
Despite challenges such as the US’s potential restrictions on AI chip exports, the demand for data centers in Malaysia remains robust. According to TA Research, global tech players continue to seek data center space in the region, attracted by cost advantages and strong infrastructure.
This demand has placed Malaysia among the top locations for industrial and logistics spaces in Southeast Asia. Knight Frank’s Asia-Pacific Logistics report for H2 2024 revealed that the Greater Kuala Lumpur area led Southeast Asia in warehouse and manufacturing facility rental growth, surpassing other regional metropolises with a 5% increase in half-yearly rental rates.
Allan Sim, Senior Executive Director at Knight Frank Malaysia, highlighted the continued stability of the industrial market in Greater Kuala Lumpur, driven by foreign manufacturers’ growing demand for industrial facilities. As Malaysia positions itself as a regional industrial powerhouse, the sector’s outlook remains positive, fueled by infrastructure enhancements and strategic investments in high-tech and logistics capabilities.
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