Malaysia rises as key hub for future-ready workspaces: Knight Frank

New Straits Times

05-06-2025

KUALA LUMPUR: Malaysia is emerging as a key Southeast Asian hub for multinational corporations seeking resilient and future-ready workspaces, amid shifting global corporate real estate (CRE) trends, according to Knight Frank's recently published (Y)OUR SPACE 2025 global report.
The report highlights that 50 per cent of global occupiers plan to expand their real estate footprint over the next three to five years, driving demand for more than 104 million square feet of new workspace worldwide.
It also points out that enhancing operational efficiency and resilience has surpassed environmental, social, and governance (ESG) compliance and innovation as the top focus for CRE leaders globally.
Knight Frank partner and head of global occupier research Dr Lee Elliott said companies are shedding legacy portfolios but are not retreating from physical space altogether.
"They are moving to better space and into more locations as they regionalise their portfolios," he said.
Malaysia's growing prominence is driven by heightened interest in Greater Kuala Lumpur, Johor, and Penang, key regions that appeal to global occupiers, particularly in advanced manufacturing, logistics, and regional headquarters setups.
Knight Frank reported increased attention from multinational corporations seeking to establish regional headquarters, high-specification industrial hubs, and sustainable logistics infrastructure within these locations.
The group managing director Keith Ooi said Malaysia offers a compelling value proposition for global occupiers.
"What truly sets us apart now is the growing quality of our industrial and office spaces — they are being designed with resilience, ESG-readiness, and long-term adaptability in mind," he said.
A survey showed that 38 per cent of global CRE leaders prioritise operational efficiency and resilience above other factors — reflecting what the firm describes as a "flight to functionality".
This trend indicates a strong preference among occupiers for hybrid-ready layouts, shorter leases, and locations offering diversified talent access.
Knight Frank senior executive director of office strategy and solutions Teh Young Khean said the country's value proposition extends beyond traditional cost advantages.
"Our strong multilingual workforce, growing tech talent base, and increasing ESG focus make us one of the most versatile markets for regional operations. The flight to quality is real, and Malaysia is ready," he said.
Knight Frank director of office strategy and solutions Naythan Chong noted that workplace design is now driven by outcomes rather than occupancy alone.
"In Malaysia, we're seeing increasing demand for spaces that are not only efficient but also enable collaboration, culture-building, and tech integration. Occupiers are asking us for spaces that empower teams, not just house them," he said.
The report further highlighted that 63 per cent of global respondents now prioritise purposeful, adaptable amenities over prestige-focused features, underscoring a shift towards practical, performance-oriented design.
Malaysia's newer commercial properties are also aligning with this shift, increasingly being built to green and wellness-certified standards.
Knight Frank partner and global head of occupier strategy and solutions Tim Armstrong said corporations are looking to build in optionality as they commit to new spaces.