The local commercial real estate market in Petaling Jaya is expected to see a stable and positive environment in 2024, according to Knight Frank Malaysia. This positive outlook is driven by anticipation of foreign direct investment (FDI), a stable economy, and future developments in the country. The Malaysia Commercial Real Estate Investment Sentiment Survey for 2024 conducted by Knight Frank Malaysia revealed that the property market in Malaysia continued to strengthen in 2023, with 293,095 transactions totaling RM142.5 billion in the first nine months of the year.
The survey found that there was stability in transaction volume, with an 8.8% year-on-year increase in value compared to the same period in 2022. Keith Ooi, the group managing director of Knight Frank Malaysia, stated that the resilient performance of both the economy and the real estate market in 2023 sets the stage for a stable and cautiously optimistic outlook for 2024. He highlighted the surge in demand for data centers in the Apac region and growing interest in alternative investments such as serviced residences and industrial parks as factors driving the resurgence of the commercial real estate market post-pandemic.
According to the survey, 68% of respondents believe that FDI will be more favorable in 2024 due to better economic conditions. The manufacturing sector dominates FDI in Malaysia and is expected to continue attracting investment due to the availability of resources and a conducive ecosystem. Additionally, 62% of respondents believed that the Business Confidence Index would be positive, attributed to a stable economic environment and anticipated future developments.
In terms of Budget 2024, 60% of respondents found it neutral towards the commercial property market. Despite global challenges, respondents expressed optimism about Malaysia’s economic performance, digital evolution, and the real estate market. Factors such as a resilient labor market, positive consumer sentiments, and political stability contribute to enhanced investor confidence on both domestic and international fronts.
Research and consultancy executive director Amy Wong noted that respondents predicted a positive increase in investments in the retail, healthcare, and educational/institutional sub-sectors in 2024. However, minimal interest was observed in the office and industrial/logistics sub-sectors, while the hotel/leisure sector maintained a trend similar to that of 2023.
Looking ahead to 2026, respondents expressed keen interest in serviced residences/hotels in established areas like Klang Valley, Penang, and Sabah, driven by increased tourism and a resurgence in the hotel industry post-pandemic. Industrial/business parks, especially in regions like Klang Valley, Penang, and Johor, are attracting investors exploring opportunities in logistics and industrial hubs amid the rise of the digital economy.
Furthermore, there is a growing preference for alternative investments, with notable interest in sectors like co-living/student accommodation, co-working/flexible office spaces, and the data center industry. These trends reflect evolving work preferences and technological advancements in the real estate market. Overall, the outlook for the local commercial real estate market in Petaling Jaya in 2024 appears to be positive and promising, driven by various factors contributing to its stability and growth.