Malaysia emerges as strategic real estate hub amid global trade shifts
KUALA LUMPUR: As global trade tensions escalate and tariff policies grow more volatile, multinational corporations (MNCs) are recalibrating their real estate strategies—placing Malaysia in a strong position as a preferred investment destination, according to Knight Frank.
In its latest regional report, From Whiplash to Resilience: Corporate Real Estate in the New World Order, Knight Frank highlights that sweeping tariffs—some as high as 124.1 per cent on Chinese imports during the Trump administration—have disrupted trade with over 57 countries.
As a result, MNCs are moving away from speculative expansion and instead prioritising operational resilience, seeking locations that offer clarity, agility, and fit-for-purpose real estate solutions.
Malaysia is emerging as a standout choice, with the report noting its appeal for cost-efficient, adaptable, and future-ready industrial property offerings.
While regional peers such as Vietnam and India remain attractive for their scale, Knight Frank underscores Malaysia's strategic flexibility as a key differentiator in today's fragmented global trade landscape.
"In today's fragmented trade landscape, Malaysia is proving attractive not because of bold moves but because of its ability to offer reliable, purpose-built industrial solutions that align with the operational demands of modern businesses," said Keith Ooi, group managing director, Knight Frank Malaysia.
Knight Frank's research points to a significant uptick in Chinese investment into Malaysia's manufacturing sector, with inflows jumping from RM3.85 billion in 2017 to RM19.67 billion in 2018. This growth is being fuelled by manufacturers seeking supply chain diversification and a hedge against rising costs elsewhere.
This trend, recently revitalised by high-level diplomatic engagements such as President Xi Jinping's state visit, reflects growing demand for build-to-suit facilities offering shorter leases, cost transparency, and customisable fit-outs, attributes increasingly sought in the post-pandemic era.
Christine Li, head of research for Asia-Pacific at Knight Frank, added, "Malaysia's real estate market has quietly adapted."
"We're seeing a shift from rigid 5-year lease terms to more agile, modular structures, especially in suburban industrial zones. These changes cater to SMEs and MNCs alike who are navigating unpredictable tariff regimes."
The report stated that government support is also bolstering investor sentiment. Initiatives like the Johor–Singapore Special Economic Zone (JS-SEZ) aim to boost cross-border SME collaboration and enhance logistics, reinforcing Malaysia's positioning as a strategic—not secondary—player in regional economic realignment.
While the global outlook remains cautious, Knight Frank sees Malaysia as offering "mixed but promising" potential, thanks to its strong fundamentals, policy clarity, and ability to adapt to shifting regional demand.
"Malaysia may not be the loudest player in the room, but its flexibility, policy clarity, and infrastructure readiness are increasingly winning over global occupiers looking for long-term viability, not just short-term arbitrage," said Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank.
As global supply chains decentralise, Malaysia's ability to deliver future-fit, agile real estate solutions may well become its most valuable competitive advantage.
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