Klang Valley to remain mainstay of industrial hubs
PETALING JAYA: Klang Valley will likely remain the largest industrial hub in the country on the back of its relatively more mature industrial parks, infrastructure and strategic access to ports, according to Kenanga Research.
Specifically on Johor, the research house gathered that its industrial and data centre boom commenced with the launch of YTL Green Data Centre Park in Kulai in August 2022.
This kick-started interests by large multinationals in the state, further fuelling its investments into that space, it noted.
The research house said with the officiation of Johor's Forest City Special Financial Zone in September 2024 and Johor-Singapore Special Economic Zone in January 2025, in addition to the increase in cross-border activities with Singapore stemming from the upcoming launch of the Rapid Transit System link, it believes that activities and investments into the state could remain buoyant in the near-to-medium term.
According to property consultancy company Knight Frank Malaysia, between 2020 and 2024, annual industrial transaction values in Klang Valley and Johor Baru (including Kulai) grew by an 18% and 40% four-year compounded annual growth rate, respectively.
While this could be attributed to pent-up demand coming out of the Covid-19 pandemic, it ties in with the increase of capital investments injected into the mentioned regions, Kenanga Research said.
Kenanga Research believes Penang remains a hot spot for industrial activity, mostly dominated by the technology and semiconductor sectors.
The brokerage recently co-organised a real estate event with Knight Frank on the property consultancy's exclusive launch of its half-yearly real estate highlights for the first half of 2025.
Focusing on high-rise residential trends, Knight Frank highlighted that transaction volumes and values in Kuala Lumpur had picked up mostly in 2022, coming out of the pandemic.
Knight Frank found it worth noting as well that the growth of average transaction values had outpaced volumes, reflecting a higher appetite by homebuyers for higher-priced homes.
From Kenanga Research's checks among property developers and mortgage lenders, the pick-up in transaction volumes in 2022 could have been made up by more affordable offerings (RM300,000 to RM500,000) which led market launches at that time, owing to development being stalled by the movement control orders between 2020 and 2021.
On the data centre front, there was a surge in data centre investments post-Covid-19, with total investment reaching RM160bil in 2024, more than triple the amount in 2023.
However, the sector is now entering a more mature execution phase of announced plans, Knight Frank noted.
In the first half of 2025, digital investments totalled RM42.6bil versus RM66.2bil in the similar period last year, with over 70% allocated to data centres and cloud infrastructure.
While Johor continues to lead in data centre development, Klang Valley has also seen healthy activity.
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