VPEX 2021 webinar EP 3: Malaysia remains a preferred destination for industrial investment

PETALING JAYA (Oct 5): Beyond the cost factor, Malaysia remains a preferred destination for industrial investment in the Asia region, for our well-developed infrastructure, land resources and a large talent pool.

These are the key points shared by consultants from Klang Valley, Penang and Johor during the third episode of EdgeProp Malaysia’s FB LIVE Webinar Series titled “New norm property ‘darlings’ you must not miss!”

EdgeProp Malaysia’s FB Live webinar series is held in conjunction with EdgeProp Malaysia Virtual Property Expo 2021, which kickstarted from Sept 17 to Oct 15, 2021. (Click here to VPEX 2021)

Although there are many choices in the region, such as Thailand, Singapore and Indonesia, KGV International Property Consultants executive director Samuel Tan said as for users who are looking for new sites for their factories, most of them will choose Malaysia.

Southern region, which has many new offerings from industrial parks to Senai Airport City, is gaining investors’ attention especially from Singapore.

According to him, in the first half of 2021, Johor attracted RM6.6 billion in foreign direct investment.

“If we can maintain this tempo, we should surpass the total investments of RM11.45 billion recorded in 2019. With a high vaccination rate and loosening of the economy and with industrialists learning how to navigate around the pandemic, we believe there will be more activities in this sub-sector,” he said.

Tan added that the cost factors as well as government policies might cause investors to look at other alternatives. “For example, the Singapore government may want you to spend a certain amount of capital expenditure within a certain time frame before they renew their lease or to exploit a certain plot ratio, otherwise you will be underutilizing your space.”

“All these factors make them want to consider an alternative and Malaysia is an alternative because we [Malaysia] play a very complementary role and our culture is almost similar, the land is cheap and we have skilled workers,” said Samuel, adding that many factories operating in Malaysia are from Singapore.  

CBRE | WTW director Tan Chean Hwa concurred with Samuel that the cheaper land is an attractive point with the addition of skilled workers in Malaysia.

“Most of these users and investors use the USD denomination [during their transactions], so when the Malaysian ringgit is converted to USD, it is relatively cheap for them, especially when we are comparing prices in Singapore as well,” said Chean Hwa. 

Meanwhile, Knight Frank executive director Allan Sim said that Malaysia is lucky in terms of the offerings available to investors and the pace at which business operations are working.

“If you compare to Singapore, there are not many industrial developments because they are going for more high-quality kinds of services and business. As for Indonesia, the pace [of business operations] is not as fast as us (Malaysia), so perhaps Thailand is our nearest competitor,” said Sim. 

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