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Industrial property the star performer in 2022



PETALING JAYA: The industrial property segment has become a shining light for the property sector, with industrial property transactions in the first nine months of last year exceeding the total in 2021.

RHB Research said RM15.3 billion worth of industrial properties – factories, warehouses and manufacturing facilities – were transacted in the first nine months of last year (9M 2022), up 35% compared with RM11.3 billion in the corresponding period of 2021.

Notably, it said this makes up 90% of 2021’s full-year transacted value of RM17 billion. Likewise, the number of transactions for industrial properties domestically grew by 57% year-on-year (y-o-y) to reach 6,043 transactions in 9M 2022 (9M 2021: 3,837 transactions).

In a note today, RHB Research pointed out that the number of industrial properties transacted in 9M 2022 alone already exceeded 2021’s full-year number of 5,595 transactions.

Such trends indicate that Malaysia’s industrial property sector has grown over the years, it added.

According to the research house, industrial property transactions in states such as Johor also recorded a huge increase of 72% y-o-y in terms of transaction value in 9M 2022, reaching RM2.7 billion versus RM1.6 billion in the same period of 2021.

“Even if there were no industrial property transactions recorded in the fourth quarter of 2022, the RM2.7 billion transacted during 9M 2022 in Johor was already higher than the full-year transacted values between 2017 and 2021.

“This is not much of a surprise, given Johor’s proximity to Singapore, which houses a lot of multinational corporations,” it said.

RHB Research also said contractors should leverage more on the industrial property segment, which has remained resilient post-pandemic and is poised for further growth.

It said China’s reopening could lead to an increase in foreign direct investments (FDIs), particularly for the manufacturing sector.

“This is further facilitated by the fact that Malaysia is one of China’s export partners and due to the country’s strategic location, a gateway to Asean,” it added.

RHB Research retained its “neutral” stance on the overall construction sector considering the risks surrounding public infrastructure projects. It advocated investors to focus on contractors that have ventured into new types of jobs such as data centres and industrials.
January 31, 2023
Source: Daily Express
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